BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |AB 779 |Hearing |6/29/16 |
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|Author: |Cristina Garcia |Tax Levy: |No |
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|Version: |6/2/16 |Fiscal: |Yes |
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|Consultant|Favorini-Csorba |
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Local government: financial disclosures
Requires local agencies to post the names and total compensation
of elected officials and the ten highest-paid employees on their
websites.
Background
The State Controller must compile and publish reports of the
financial transactions of local governments, including counties,
cities, special districts, and joint powers authorities. These
annual reports must also state the annual compensation of a
local agency's elected officials, officers, and employees in
accordance with reporting instructions developed by the
Controller. The Controller must make these reports, including
compensation data, available on its website in a form that can
be printed and downloaded. Local agencies that maintain a
website must post the report and the compensation information,
or a link to the report on the Controller's website, in a
conspicuous location (AB 2040, Garcia, 2014 and AB 341,
Achadjian, 2015).
The Controller's instructions define compensation to include
salaries, overtime pay, lump sum pay, pension contributions,
health/vision/dental benefits, deferred compensation
contributions, and any other compensation (such as automobile
allowances). Local agencies must compile this information for
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each employee, who is identified by their classification,
including whether the employee held multiple positions. In 2015,
the Legislature required local agencies to submit this
information for the previous calendar year no later than April
30th (AB 341, Achadjian, 2015).
In recent years, several small cities in Los Angeles County have
come under scrutiny for their compensation practices. In
particular, beginning in July 2010, a series of news reports
revealed that City of Bell officials received some of the
highest salaries in the nation, topping $700,000 annually.
These revelations led to further inquiries into financial
irregularities that culminated with convictions for the former
mayor, four former city councilmembers, the city administrator,
and the assistant city administrator. More recently, City of
Maywood officials drew criticism in May 2016 for receiving
automobile stipends of $250/month, even though the city is the
second smallest in the county and covers approximately one
square mile.
Troubled by these abuses, some advocates for open government
want local agencies to post additional information about
employee compensation on their website.
Proposed Law
Assembly Bill 779 requires a city, county, city and county, or
special district to post a link on its homepage that contains
the names, positions, and total compensation of each elected
official within that entity for the previous fiscal year and the
10 employees with the greatest total compensation. AB 779
defines total compensation to include the aggregate of payments
for salaries, overtime, unused vacation, stipends, pension
contributions, retirement contributions, health premium
contributions, automobile allowances, phone allowances,
technology allowances, and any other type of compensation
provided. Reimbursements or payments for work-related travel
expenses do not count as compensation under the bill. The city,
county, or special district must aggregate the compensation of
each employee that holds more than one position.
AB 779 requires this information to be posted within six months
of the close of the fiscal year. A city or special district that
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does not have a website must work with the relevant county to
post the information on the county's website.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Exorbitant employee compensation
undermines the public's faith that taxpayer dollars are being
put to the best use. But without adequate information on
compensation, it is difficult to identify and hold accountable
those who are being overpaid. The average citizen is unlikely
to think of the State Controller's Office website when looking
for local government compensation information; logic leads them
to look on the local government's website. And even if a
taxpayer can find the right website, it can be difficult to tie
compensation to specific individuals. AB 779 helps Californians
to easily find information about their local elected officials
and the highest earners to hold them accountable. Matching the
level of compensation with names, instead of only employee
classifications, and breaking out parts of compensation (such as
car allowances) makes it easier to identify egregious
compensation practices. The California Legislature already
posts names and salaries for all its employees; AB 779 ensures
that local governments take small steps in a similar direction.
2. Redundant . State law already requires local governments to
provide exhaustive information on the compensation of its
employees to the State Controller's Office, which then posts the
information in an accessible format. Local agencies must also
include a prominent link to that information on their website,
either by posting the information themselves or pointing the
user to the Controller's website. AB 779 requires local
governments to post nearly identical and redundant information
on their websites. In addition, one of the few new pieces of
information required by the bill-names of employees-poses a
privacy and safety risk by potentially subjecting employees to
harassment. If there are concerns with the transparency
afforded by the Controller's compensation reports, it makes
sense to address those deficiencies instead of creating costly
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and duplicative requirements. The Committee may wish to
consider amending AB 779 to modify the components and
presentation of those reports instead of imposing new
requirements.
3. Homepage . Even in today's digital age, not all cities and
special districts have websites. Typically, current law only
requires online posting of materials (such as agendas) if local
agencies have a website. AB 779 requires cities and special
districts that lack websites to work with the relevant county to
post compensation information. Counties with large numbers of
small special districts may find themselves expending
significant effort to collect and host this information. This
burden may fall especially hard on rural counties that have
smaller population bases. The Committee may wish to consider
amending AB 779 to instead require local agencies to only post
the compensation information on their website if they have one.
4. Timing is everything . Just last year, the Legislature amended
the deadline by which cities, counties, and special districts
must provide annual compensation information to the State
Controller's Office: April 30th for the information provided in
the preceding calendar year. But AB 779 requires these agencies
to post the information within six months of the close of the
fiscal year. The Committee may wish to consider amending AB 779
to specify the same deadline as in current law.
5. New bill, prior votes not relevant . As passed by the
Assembly, AB 779 contained provisions relating to transportation
and congestion management. The Senate Governance & Finance
Committee never heard that version of the bill. The June 2
amendments deleted AB 779's contents and inserted the current
language relating to local government compensation.
6. Mandate . The California Constitution generally requires the
state to reimburse local agencies for their costs when the state
imposes new programs or additional duties on them. According to
the Legislative Counsel's Office, AB 2801 creates a new
state-mandated local program because it increases the duties of
local officials. AB 2801 says that if the Commission on State
Mandates determines that it creates a state-mandated local
program, the state must reimburse local agencies by following
the existing statutory process for mandate claims.
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7. Prior and related legislation . AB 2040 (Garcia, 2014)
requires local agencies to prominently post a link on their
websites to the Controller's compensation reports. Previous
versions of the legislation also required local agencies to post
the names and monthly compensation of every employee and elected
official employed by the agency. AB 2257 (Maienschein), which
the Committee will hear on June 29th along with AB 779, directs
local agencies that have websites to include on their homepage a
link to the most recent agenda of their governing bodies.
Assembly Actions
Not relevant to the June 2nd version of the bill.
Support and
Opposition (6/23/16)
Support : California League of Conservation Voters; Sierra Club
California.
Opposition : California Professional Firefighters; California
Special Districts Association; California State Association of
Counties; County of Sacramento; League of California Cities;
Rural County Representatives of California; Urban Counties of
California.
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