BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 407 HEARING: 4/3/13
AUTHOR: Hill FISCAL: Yes
VERSION: 4/1/13 TAX LEVY: No
CONSULTANT: Ewing
LOCAL OFFICIALS' COMPENSATION
Extends limitations on local agencies' employment contracts
to additional employees.
Background and Existing Law
The Meyers-Milias-Brown Act governs labor-management
relations, although its bargaining and representation
procedures generally do not apply to executive employees.
Existing statutes restrict the compensation that can be
offered by local agencies to employees not covered by the
Meyers-Milias-Brown Act.
Last session, the Legislature approved AB 1344 (Feuer),
which specifies local agency compensation practices, in
response to abuse of power allegations among some local
agencies. The Feuer bill specified the following:
Local agencies' governing boards must ratify their
executive employees' contracts of employment in open
session, and cannot call a special meeting for that
purpose. Copies of those employment contracts and
settlement agreements must be publicly available.
Local agencies are prohibited from entering into a contract
that provides for automatic renewal if that contract
provides for an automatic increase in compensation that
exceeds a cost-of-living adjustment.
Employment contracts must include provisions limiting, upon
termination, the maximum cash settlement to be paid to no
more than an amount equal to 18 months' salary. If the
executive's contract has less than a year to run, then the
amount can't exceed the remaining expected salary.
Employment contracts also must include provisions for the
local agency to be reimbursed for any paid leave salary and
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the cost of legal criminal defense funded by the agency, if
the officer or employee is convicted of a crime involving
an abuse of public office or position.
There is concern that the Feuer bill's provisions did not
extend to some local agency executives who work under
contracts.
Proposed Law
Senate Bill 407 extends specified limits on executive
compensation to any employee not covered by the
Meyers-Milias-Brown Act, who is a deputy chief executive
officer, an assistant chief executive officer, or whose
employment is covered by an employment contract. Those
limits would include:
A prohibition on the automatic renewal of a
contract that provides for an automatic increase in
compensation exceeding a cost-of-living adjustment.
A maximum cash settlement equal to 18 months'
salary.
Prohibition on the use of a special meeting by the
legislative body of a local agency to discuss or make
decisions on compensation.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . SB 407 is a minor expansion of
legislation adopted last session to address abuse of power
practices brought to light by local agency compensation
scandals. SB 407 extends existing compensation
restrictions to all local agency executives who work under
an employment contract. SB 407 furthers the provisions
adopted last session and will assist in the prevention of
inappropriate and extravagant rewards to local agency
executives, and reduce the liability of local governments
to provide paid leave and legal defense costs for
executives who are convicted of abuse of power charges.
Support and Opposition (3/28/13)
SB 407 - 4/1/13 -- Page 3
Support : Unknown.
Opposition : Unknown.