BILL ANALYSIS Ó
SB 879
Page 1
SENATE THIRD READING
SB 879 (Budget and Fiscal Review Committee)
As Amended August 27, 2014
Majority vote
SENATE VOTE :Vote not relevant
BUDGET 16-9
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|Ayes:|Skinner, Bloom, Campos, | | |
| |Chesbro, Daly, Dickinson, | | |
| |Gordon, | | |
| |Jones-Sawyer, Mullin, | | |
| |Muratsuchi, Nazarian, | | |
| |Rodriguez, Stone, Ting, | | |
| |Weber, Dababneh | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Gorell, Chávez, Grove, | | |
| |Harkey, Mansoor, Allen, | | |
| |Nestande, Patterson, | | |
| |Wagner | | |
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SUMMARY : Provides legislative ratification for the memoranda of
understanding (MOU) agreed to by the state and the following
state bargaining units (BUs). Specifically, this bill :
1)Provides legislative ratification for the memoranda of
understanding for the following state bargaining units:
a) BU 2 (Attorneys and Hearing Officers), represented
exclusively by the California Attorneys, Administrative Law
Judges and Hearing Officers in State Employment.
b) BU 10 (Professional Scientists), represented exclusively
by the California Association of Professional Scientists.
c) BU 13 (Stationary Engineer), represented exclusively by
the International Union of Operating Engineers.
2)Provides legislative ratification for the addendums to the MOU
for the following bargaining unit:
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a) BU 8 (Firefighters), represented exclusively by the
Department of Forestry and Fire Protection, Local 2881.
EXISTING LAW :
1)Establishes the Ralph C. Dills Act, which requires the state
to collectively bargain with official representatives of
employee groups (i.e., bargaining units) regardless of wages
and working conditions, and to define negotiated agreements in
MOUs.
2)Establishes the California Department of Human Resources
(CalHR) as the official representative of the Governor in all
matters related to collective bargaining.
3) Requires the any MOU between the state and an official
representative must be ratified by the Legislature.
4)Requires that an addendum to a ratified MOU must be submitted
to the Joint Legislative Budget Committee (JLBC) for analysis,
and, if so required by the JLBC, must also be approved by the
Legislature.
5)Establishes the California Public Employees' Retirement System
(CalPERS), which provides health and retirement benefits for
the state employees.
6)Requires the Legislative Analyst's Office (LAO) to analyze all
state MOUs and to provide analyses of the MOUs and their
fiscal impact to the Legislature within 10 days of receipt of
the MOUs from CalHR.
7)Establishes comprehensive public employee pension reform
through enactment of the Public Employees' Pension Reform Act
of 2013 (PEPRA) that apply to all public employee and public
pension plans on and after January 1, 2013, excluding the
University of California and charter cities and counties that
do not participate in a retirement system governed by the
state statute.
FISCAL EFFECT : Appropriates $12.629 million for BU 2, $3.124
million for BU 10, $2.356 million for BU 13, and $10.236 million
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for BU 8 for fiscal year 2014-15.
COMMENTS : The 2014-15 Budget Act included preliminary funding
for BUs 10 and 13, in anticipation of the MOUs. This trailer
bill will increase the overall 2014-15 budget by $28.345 million
($11.973 million General Fund) in accordance with these MOUs.
The following information summarizing the general provisions of
the MOUs was provided by CalHR:
Number of Employees:
The BU 2 agreement affects approximately 3,869 full-time
equivalents.
The BU 10 agreement affects approximately 2,870 full-time
equivalents.
The BU 13 agreement affects approximately 952 full-time
equivalents.
Retirement Benefit Formula Calculation:
BUs 2, 10 and 13 employees who become CalPERS members on or
after January 1, 2013, are subject to PEPRA Retirement Formula
of 2% at age 62.
BUs 2, 10 and 13 employees who become CalPERS members on or
after January 1, 2013, are subject to the State Safety PEPRA
Retirement Formula of 2% at age 57.
BUs 2, 10 and 13 employees who become CalPERS members on or
after January 1, 2013, are subject to the Second Tier PEPRA
Retirement Formula of 1.25% at age 67.
Pensionable compensation caps will apply to new CalPERS members
subject to PEPRA as defined under PEPRA.
Employee Pension Contribution - Attorneys and Hearing Officers:
BU 2 Miscellaneous and Industrial members in the First Tier
retirement subject to social security, contribute 9% of monthly
pensionable compensation.
BU 2 Miscellaneous and Industrial members in the First Tier
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retirement not subject to social security, contribute 10% of
monthly pensionable compensation.
Effective July 1, 2013, all BU 2 State Safety members began
contributing 11% of monthly pensionable compensation.
Effective July 1, 2013, all BU 2 Second Tier members began
contributing 1.5% of monthly pensionable compensation and the
contribution will increase by 1.5% annually. The final annual
increase in the contribution rate shall be adjusted as
appropriate to reach 50% of normal cost.
Employee Pension Contribution - Scientists:
All BU 10 Miscellaneous First Tier members contribute 8% of
monthly pensionable compensation.
Effective July 1, 2013, all BU 10 State Safety members began
contributing 10% of monthly pensionable compensation. Effective
July 1, 2014, all BU 10 State Safety members shall contribute
11% of monthly pensionable compensation.
Effective July 1, 2013, all BU 10 Industrial members began
contributing 9% of monthly pensionable compensation.
On July 1, 2013, all BU 10 Second Tier members began
contributing 1.5% of monthly pensionable compensation and the
contribution will increase by 1.5% annually. The final annual
increase in the contribution rate shall be adjusted as
appropriate to reach 50% of normal cost.
Employee Pension Contribution - Stationary Engineer:
Effective July 1, 2013, all BU 13 Second Tier members shall
contribute 1.5% of monthly pensionable compensation and the
contribution will increase by 1.5% points annually. The final
annual increase in the contribution rate shall be adjusted as
appropriate to reach 50% of normal cost.
Compensation BU 2:
Effective July 1, 2014, all BU 2 represented classifications
receive a 2% General Salary Increase (GSI).
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Effective July 1, 2015, all BU 2 represented classifications
receive a 2.5% GSI.
Compensation BU 10:
The month following ratification of the MOU, all BU 10
represented classifications shall receive a one-time bonus of
$1,000.
Effective July 1, 2015, all BU 10 represented classifications
shall receive a 3% GSI.
Compensation BU 13:
Effective July 1, 2014, contingent on the projected State
revenues of the 2014-15 Budget, all BU 13 represented
classifications receive a 2% GSI.
Effective July 1, 2015, all BU 13 represented classifications
will receive a 2.5% GSI.
Upon ratification of the tentative agreement, all eligible
Bargaining Unit 13 employees will received a one-time payment of
$250.00.
Effective July 1, 2014, and following Union ratification of this
agreement and upon approval of funding by the Legislature, Unit
13 employees in the Water and Sewage Plant Operator
classifications who possess a valid State of California Waste
Water and/or Water Treatment Certification at the level of Grade
II issued by the State of Water Resources Control Board and/or
California Department of Public Health shall receive a 2%
differential each month.
Effective July 1, 2015, Unit 13 employees who work at the Sierra
Conservation Center and the Richard J. Donovan Correctional
Facility will be eligible for a $2,400 per year recruitment and
retention bonus payable 30 days following the completion of 12
consecutive pay periods.
Effective July 1, 2015, Unit 13 employees who work in the
Department of General Services building in the city of San
Francisco will be eligible for a $2,400 per year recruitment and
retention bonus payable 30 days following the completion of 12
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consecutive pay periods.
Upon Union ratification of this agreement, the overtime meal
allowance provided by the Department of Transportation will
increase from $5 to $6.
Heath Benefits - Employer Contribution:
BU 2 - The pay period following ratification, the employer
health benefits contribution to the health insurance portion of
the BU 2 Consolidated Benefits allowance will be set at a dollar
amount that equals the 80/80 formula. The amounts shall be
increased on January 1, 2015, and January 1, 2016.
BU 13 - The state's monthly contribution to the health insurance
portion of BU 13 employee's allowance shall be a flat dollar
amount equal to 80% of the weighted average of the premiums for
the four basic health benefit plans with the largest enrollment
(the 80/80 formula).
Heath Benefits - Dependent Coverage:
BU 10 - Thirty days following ratification, BU 10 employees who
first become eligible for health enrollment will become eligible
for the full employer contribution for dependent health coverage
after one year of state employment. The state will contribute
75% of the normal amount for dependents during the vesting
period.
BU 13 - Effective the first day of the pay period following
Union ratification of the agreement, BU 13 employees will become
eligible for the full employer contribution for dependent health
coverage after one year of state employment. The state will
contribute 75% of the normal amount for dependents during the
vesting period.
Miscellaneous:
The agreements contain various miscellaneous provisions.
Duration:
BU 2 - Three years - July 2, 2013 through July 1, 2016
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BU 10 - Two years - July 2, 2013, through July 1, 2015
BU 13 - Three years - July 2, 2013 through July 1, 2016
Analysis Prepared by : Genevieve Morelos / BUDGET / (916)
319-2099
FN: 0005571