BILL ANALYSIS Ó SB 102 Page 1 Date of Hearing: August 29, 2013 ASSEMBLY COMMITTEE ON BUDGET Nancy Skinner, Chair SB 102 (Budget and Fiscal Review Committee) - As Amended: August 27, 2013 SENATE VOTE : Vote not relevant SUBJECT : Addenda to Memoranda of Understanding involving 12 state bargaining units SUMMARY : Approves side agreements recently entered into by the administration and state bargaining units 1, 3, 4, 5, 7, 11, 12, 15, 17, 18, 19, and 20. These agreements amend existing Memoranda of Understanding (MOUs) but do not constitute new MOUs. Specifically, this bill : 1)Authorizes an addendum for Bargaining Unit 12, employees of the Department of Water Resources. This addendum authorizes salary increases, effective July 1, 2013, for certain rank and file and supervisor classifications at DWR to assist with short term critical retention needs. Increases range from 17.9% to 37.4%. Two classifications, Electrical Mechanical Testing Technician and the Control System Technician, will be consolidated into one, the Hydroelectric Plant (HEP) Technician I, II, III, pending approval by the State Personnel Board (SPB). The total amount of funding needed for ratification is $18.3 million. This agreement affects approximately 534 positions. Increases will be staged for retirement purposes as follows: after July 1, 2013 and before July 1, 2014, any pay increase will not be used to determine final compensation; after July 1, 2014 and prior to July 1, 2015, 50% of the salary increase shall be used to determine final compensation. Effective July 1, 2015 and continuing thereafter, the entire salary increase shall be used to determine final compensation. 2)Authorizes addenda for Bargaining Units 1, 4 and 7, employees of the Department of Motor Vehicles. These addenda authorize salary increases, effective July 2, 2013, for certain rank and file and supervisor classifications based on a review that recommended classification and salary restructuring. The majority of these employees will receive a 7.5% increase and approximately 200 will receive a 1.5% increase. The total SB 102 Page 2 amount of funding needed for ratification is $26.8 million. This agreement affects approximately 5,375 rank and file positions and 1,167 related excluded employees. 3)Authorizes an addendum for Bargaining Unit 5, employees of the California Highway Patrol. This addendum is a result of a statutory salary survey for CHP rank and file highway patrol officers. However, the 5.9% salary increases have been previously codified in provisional language in the 2013 Budget Act. This ratification is specifically for reimbursement increases for specified expenses incurred while traveling on state business, per the Joint Legislative Budget Committee letter dated August 5, 2013. While these expenses have been included in the department's budget, they have not been expressly authorized by the Legislature, according to the JLBC, and therefore require approval. No new appropriation is needed. 4)Authorizes addenda for Bargaining Units 1, 3, 4, 11, 12, 15, 17, 18, 19, and 20, employees of the Lanterman Developmental Center. These agreements address the layoff and relocation of staff. This will provide $3,500 per qualified employee for those who relocate to another position within the Department of Developmental Services (DDS), which has already been included in the department's budget. While these expenses have been included in the department's budget, they have not been expressly authorized by the Legislature, according to the JLBC, and therefore require approval. No new appropriation is needed. EXISTING LAW Ralph C. Dills Act requires the Legislature to approve any agreement that results in the expenditure of funds not already approved by the Legislature through an MOU, the budget act or some other legislative vehicle. FISCAL EFFECT : These agreements could result in an expenditure of $45.1 million in the Budget Act of 2013. COMMENTS : This bill authorizes four side agreements involving 12 bargaining units. Two of the agreements are authorizing agreements with costs that have already been included in departmental budgets. With regard to the salary increases and classification change at DWR, the administration is seeking to resolve a longstanding SB 102 Page 3 recruitment and retention issue at hydroplant facilities. High vacancy rates have led to difficulties in fully operating the State Water Project. Salary increases at the DMV are the result of a review of current classifications' workload at DMV offices that was required by a 2007 MOU. These classifications, on average, were paid 8 to 22% less than similar employees in other areas of state government. These increases also reflect the increasing complexity of work assignments in modernized DMV offices. REGISTERED SUPPORT / OPPOSITION : Support None on file. Opposition None on file. Analysis Prepared by : Mark Martin / BUDGET / (916) 319-2099