BILL ANALYSIS Ó
AB 2040
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Date of Hearing: April 2, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2040 (Garcia) - As Introduced: February 20, 2014
SUBJECT : Public official compensation.
SUMMARY : Requires local agencies to report to the State
Controller (Controller) specified information about the
compensation of local public officials and to post such
information on their websites. Specifically, this bill :
1)Requires local agencies to include in the information they
report annually to the Controller the annual compensation of a
local agency's public officials, including, but not limited
to, separately listing the name and title of each public
official and his or her monthly salary.
2)Requires a local agency that maintains an Internet Web site
(website) to post the annual compensation of its public
officials in a clear, visible, and searchable format that
includes, but is not limited to, separately listing the name
and title of each public official, and his or her monthly
salary. The local agency shall update the posted compensation
information at least annually.
3)Allows a local agency to comply with the requirement in 2),
above, by posting in a conspicuous location on its website a
link to the Controller's Government Compensation in California
(GCC) Internet website at www.publicpay.ca.gov.
4)Provides the following definitions:
a) "Compensation" means the salary, per diem, fees,
reimbursement for expenses, and employment benefits paid
with public funds;
b) "Local agency" means any city, county, any district, and
any community redevelopment agency required to furnish
annual financial reports to the Controller, as specified;
c) "Public official" means every member, officer, employee
or consultant of a state or local government agency, with
the following exceptions:
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i) A judge or court commissioner in the judicial branch
of government.
ii) A member of the Board of Governors and designated
employees of the State Bar of California.
iii) A member of the Judicial Council.
iv) A member of the Commission on Judicial Performance,
as specified.
v) A federal officer or employee serving in an official
federal capacity on a state or local government agency.
d) "Salary" means any and all payments made by a local
agency as consideration for a public official's services to
the local agency, and include, but are not limited to,
wages, health benefits, pension benefits, insurance
coverage, compensated vacation and leave time, free or
discounted transportation, payment or indemnification of
legal defense costs, and any other item of value received
by the public official from the local agency; and,
e) "Per diem" means a fix sum payment from a local agency
that accrues daily to a public official when the public
official is required to incur increased daily living
expenses.
5)Provides that, if the Commission on State Mandates determines
that this bill contains costs mandated by the state,
reimbursement to local agencies and school districts for those
costs shall be made pursuant to current law governing state
mandated local costs.
EXISTING LAW :
1)Requires the Controller to compile and publish reports of the
financial transactions of each county, city, and special
district within this state, together with any other matter he
or she deems of public interest.
2)Requires the officer of each local agency who has charge of
the financial records to furnish to the Controller a report of
all the financial transactions of the local agency during the
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next preceding fiscal year.
3)Defines local agency to mean "any city, county, any district,
and any community redevelopment agency required to furnish
financial reports" pursuant to specified sections of existing
law.
4)Requires the report to be furnished within 90 days after the
close of each fiscal year and to be in the form required by
the Controller.
5)Requires the report to contain specified contents, including
"other information that the Controller requires."
6)Allows the Controller to establish the GCC website, pursuant
to his or her responsibility and authority to publish local
agency financial transaction reports.
FISCAL EFFECT : This bill is keyed fiscal.
COMMENTS :
1)Purpose of this bill . This bill requires local agencies to
report to the Controller specified information about the
compensation of local public officials and to post such
information on their websites. Local agencies can comply with
the bill's posting requirements by posting a link on their
websites to the Controller's GCC website. This bill is
author-sponsored.
2)Author's statement . According to the author, "Disclosure of
governmental salaries is subject to open records rules.
Disclosure permits the media and members of the public to
monitor the salary levels of governmental officials. This
measure would expand the details of what a state or local
government agency must publicly disclose concerning
governmental salaries. It would also ensure public disclosure
of all the 'compensation' provided to a public official, not
just governmental salary. This would mean 'compensation' may
need to be defined broadly to include salary, per diem, fees,
reimbursement for expenses, and fringe benefits."
3)Financial transaction reports and the GCC website . Existing
law, pursuant to Government Code section 12463, requires the
Controller to compile and publish reports of the financial
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transactions of each county, city, and special district within
the state, "together with any other matter he or she deems of
public interest."
Existing law also requires the officer of each local agency,
who has charge of the financial records of the agency, to
furnish to the Controller a report of all the financial
transactions of the local agency during the next preceding
fiscal year. Pursuant to Government Code section 53892, the
report must include specified information, including "other
information that the Controller requires."
The Controller launched his GCC website in response to the
2010 scandal in the City of Bell to promote government
transparency and help prevent such problems from reoccurring.
The website includes information about all employees with
wages reportable on a Federal W-2 form. Data is self-reported
by governments and is not verified by the Controller's Office.
The GCC report is a supplement to the Controller's annual
financial transactions report. The authority to collect this
information is granted under Government Code sections 12463
and 53892. These reports are due to the Controller within 90
or 110 days after their fiscal year end.
Other entities participate voluntarily in the GCC program,
including state agencies, K-12 school districts, courts, the
University of California system, the California State
University system, community colleges, First Five, and fairs
and expos.
The GCC report gathers 12 items of information about annual
compensation from cities, counties and special districts each
year, including:
a) Identification of elected officials;
b) Department name;
c) Classification (job title);
d) Multiple position footnote (if more than one position is
held concurrently);
e) Annual salary minimum and maximum;
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f) Total regular base pay* ;
g) Overtime pay*;
h) Lump sum pay (one-time cash outs; vacation, sick leave
payouts*);
i) Other pay (additional wages earned but not part of the
regular wages for position; incentives, bonuses, stipends,
and/or auto allowances*);
j) Defined benefit plan pension formula;
aa) Employer's share of pension benefits; and,
bb) Health, dental, vision benefits.
*Total wages subject to Medicare (Box 5 of W-2)
According to the Controller's Office, the additional items
that this bill would require local agencies to report include:
a) Public official names and monthly salaries;
b) Fees;
c) Reimbursement for expenses;
d) Insurance coverage;
e) Free or discounted transportation;
f) Legal defense costs;
g) Any other item of value received; and,
h) Payments to consultants who are included in the bill's
definition of "public officials".
4)Policy considerations : The Association of California
Healthcare Districts (ACHD), in opposition, states, "State
Controller John Chiang has been posting the Local Government
Compensation Report online since 2011. That report consists
of compensation and benefit information for all
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elected/appointed officials and staff of cities, counties, and
special districts. Special districts are already complying
with the current reporting requirements and from our
experience this process works. It is unclear how AB 2040
would change the Controller's current disclosure requirements
that local agencies are already complying with. The scope of
information required by AB 2040 is so vast that the resources
needed to provide all the information would be costly and
burdensome. AB 2040 would create confusing and duplicative
work for agencies to comply with both the new requirements and
current reporting requirements. Any compensation disclosure
requirement should not include reimbursements as it is not
considered employee compensation and is not taxable income."
The California Special Districts Association, in opposition,
notes, "AB 2040 applies the proposed reporting requirements to
'public officials' as defined in Government Code section
82048, which provides public officials are 'every member,
officer, employee or consultant of a state or local government
agency' (emphasis added). However, the bill language amends
code sections that only address local agency procedure?(In
addition), AB 2040 includes requirements for both monthly
salary and annual compensation figures. Currently, local
agencies file compensation data with the (Controller) on an
annual basis. Breaking down the monthly salary, as defined,
could prove problematic?"
The California Association of Sanitation Agencies (CASA), in
opposition, asserts, "One of our primary points of opposition
is related to the definition of 'salary' being added to the
Government Code. This definition is overly broad, and
includes information that is not currently required for
calculating 'compensation' under existing law. These new
'salary' parameters?are not typically accounted for and vary
widely among employees?(and) will impose a significant burden
on our agencies to collect and calculate this
information?Additionally, CASA is concerned that the
definition of 'public official' referenced in AB 2040 has an
extremely broad application, and we see little public benefit
for including such an expansive section of our workforce in
these new reporting requirements."
The California Professional Firefighters, in opposition,
write, "The new reporting elements proposed by AB 2040 are not
only intrusive in nature, but would likely impose extensive
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administrative burdens on public agencies without providing
any meaningful public benefit in exchange."
5)Related legislation . AB 2676 (Rendon), pending in this
Committee, expands the Controller's authority to perform
audits or investigations of counties, cities, and special
districts if the Controller makes specified findings that any
of these local government entities is violating financial
requirements in state law, state grant agreements, local
charters, or local ordinances, and increases forfeiture
amounts local agencies must pay for failing to file their
financial reports with the Controller.
6)Previous legislation . AB 941 (Rendon) of 2013 was
substantially similar to AB 2676. AB 941 passed this
Committee on a 9-0 vote on May 1, 2013. AB 941 was held in
the Assembly Appropriations Committee.
AB 1035 (Muratsuchi) of 2013 changed the forfeiture amounts
local agencies must pay for failing to file their financial
reports with the Controller. AB 1035 passed this Committee on
a 8-0 vote on April 10, 2013. AB 1035 was held in the Senate
Governance and Finance Committee.
SB 186 (Kehoe and DeSaulnier) of 2012 was substantially
similar to AB 2676. SB 186 passed this Committee on a 9-0
vote on June 27, 2012. SB 186 was held in the Assembly
Appropriations Committee.
7)State mandate . This bill is keyed a state mandate, which
means the state could be required to reimburse local agencies
and school districts for implementing the bill's provisions if
the Commission on State Mandates determines that the bill
contains costs mandated by the state.
8)Support arguments : The author argues that this bill provides
additional information regarding the compensation of local
government employees that should be readily available to the
public.
9)Opposition arguments : Opponents contend that this bill
contains problematic definitions and poses a significant
compliance burden for them.
REGISTERED SUPPORT / OPPOSITION :
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Support
None on file
Opposition
Association of California Health Care Districts
California Association of Sanitation Agencies
California Professional Firefighters
California Special Districts Association
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958