BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 331|
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THIRD READING
Bill No: SB 331
Author: Mendoza (D)
Amended: 4/22/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 5-1, 4/29/15
AYES: Hertzberg, Beall, Hernandez, Lara, Pavley
NOES: Nguyen
NO VOTE RECORDED: Moorlach
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Public contracts: local agencies: negotiations
SOURCE: Author
DIGEST: This bill requires counties and cities that have
adopted a civic openness in negotiating (COIN) ordinance, as
defined, to comply with specified disclosure requirements
relating to contract negotiations with private entities.
ANALYSIS:
Existing law:
1)Enacts the Meyers-Milias-Brown Act (MMBA) which governs the
relations between local governments and their employees. The
MMBA applies to counties, cities, and special districts, but
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not school districts.
2)Establishes, under the MMBA, the framework under which local
agencies' employees who are represented by unions can
collectively bargain over wages, hours, and terms and
conditions of employment through a specified meet and confer
process.
3)Enacts the Ralph M. Brown Act (Brown Act) which requires local
agencies' meetings to be "open and public," with specific
exceptions.
4)Allows, under the Brown Act, local governments' legislative
bodies to meet in closed sessions for some aspects of labor
negotiations. For example, a legislative body may meet in
closed session to instruct its bargaining representatives,
which may be one or more of its members, on employee salaries
and fringe benefits for both union and non-union employees.
5)Requires the approval of an agreement concluding labor
negotiations with represented employees must be reported after
the agreement is final and has been accepted or ratified by
the other party. The report must identify the item approved
and the other party or parties to the negotiation.
This bill:
1)Requires a city, county, city and county, or special district
that has adopted a COIN ordinance that is effective and
operative to comply with requirements related to contracts
that the local government negotiates with any private person
or entity that seeks to provide services or goods to the local
government.
2)Specifies that its provisions apply to local governments'
contracts of a value of $50,000 or more and to any contracts
with a person or entity (or any related person or entity) of a
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cumulative value of $50,000 or more in any fiscal year being
negotiated between the local government and any private person
or entity that seeks to provide services or goods to the local
government.
3)Defines a "civic openness in negotiations ordinance" or "COIN
ordinance" as an ordinance adopted by a local government that
requires any of the following as a part of any collective
bargaining process undertaken pursuant to the MMBA:
a) The preparation of an independent economic analysis
describing the fiscal costs of benefit and pay components
currently provided to members of a recognized employee
organization.
b) The completion of the independent economic analysis
prior to the presentation of an opening proposal by the
public employer.
c) Availability for review by the public of the independent
economic analysis before presentation of an opening
proposal by the public employer.
d) Updating of the independent economic analysis to reflect
the annual or cumulative costs of each proposal made by the
public employer or recognized employee organization.
e) Updating of the independent economic analysis to reflect
any absolute amount or change from the current actuarially
computed unfunded liability associated with the pension or
postretirement health benefits.
f) The report from a closed session of a meeting of the
public employer's governing body of offers, counteroffers,
or supposals made by the public employer or the recognized
employee organization and communicated during that closed
session.
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g) The report from a closed session of a meeting of the
public employer's governing body of any list of names of
persons in attendance during any negotiations session, the
date of the session, the length of the session, the
location of the session, or pertinent facts regarding the
negotiations that occurred during a session.
4)Requires a local government that has adopted a COIN ordinance
to comply with the following requirements for all contracts
being negotiated between the local government and any private
person or entity that seeks to provide services or goods to
the local government:
a) The city, county, or city and county must designate an
unbiased independent auditor to review the cost of any
proposed contract. The independent auditor must prepare a
report on the cost of the contract and provide the report
to all parties and make it available to the public before
the governing body takes any action to approve or
disapprove the contract. The report must comply with the
following:
i) The report must include a recommendation regarding
the viability of the contract, including any supplemental
data upon which the report is based, and must determine
the fiscal impacts attributable to each term and
condition of the contract.
ii) The report must be made available to the public
at least 30 days before the issue can be heard before the
governing body and at least 60 days before any action to
approve or disapprove the contract by the governing body.
iii) Any proposed changes to the contract after it
has been approved by the governing body must adhere to
the same approval requirements as the original contract.
The changes must not go into effect until all of the
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requirements of this subdivision are met.
b) The local government must disclose all offers and
counteroffers to the public within 24 hours on its Internet
Web site.
c) Before approving any contract, the local government must
release a list of names of all persons in attendance,
whether in person or by electronic means, during any
negotiation session regarding the contract, the date of the
session, the length of the session, the location where the
session took place, and any pertinent facts regarding the
negotiations that occurred in that session.
d) Representatives of the governing body must advise the
governing body of all offers, counteroffers, information,
or statements of position discussed by the private entity
and local government representatives participating in
negotiations regarding any contract.
e) Each governing body member and staff members of
governing body offices must disclose publicly all verbal,
written, electronic, or other communications regarding a
subject matter related to the negotiations or pending
negotiations they have had with any official or unofficial
representative of the private entity within 24 hours after
the communication occurs.
f) A final governing body determination regarding approval
of any contract must be undertaken only after the matter
has been heard at a minimum of two meetings of the
governing body wherein the public has had the opportunity
to review and comment on the matter.
5)States that its provisions do not apply in a local government
that suspends, repeals, or revokes its COIN ordinance.
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6)Declares that the statutes that it enacts shall be known, and
may be cited, as the Civic Reporting Openness in Negotiations
Efficiency Act, or CRONEY.
Background
In response to the confidentiality that surrounds local
governments' labor contract negotiations, several California
local governments recently have adopted COIN ordinances that
impose requirements on local governments' contract negotiations
with represented employees' bargaining units. The ordinances
typically require the local government to:
Hire an independent negotiator.
Obtain an independent analysis of the costs of contract
proposals.
Require public disclosure, within 24 hours, of offers
and counteroffers made during the negotiations.
Disclose communications that elected local government
officials have with representatives of recognized employee
organizations.
Public disclosure of a proposed contract before it is
placed on an agenda for approval by a local legislative
body.
Ordinances imposing some or all of these requirements have been
adopted by Orange County, the cities of Cost Mesa, Fullerton,
and Beverly Hills, and the East Bay Municipal Utility District.
The COIN ordinances' proponents argue that the local
requirements are necessary because the secrecy that shields
labor contract negotiations results in labor agreements' being
approved by elected officials without sufficient opportunities
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for the public scrutiny.
Local COIN ordinances have been opposed by local governments'
recognized employee organizations, whose members argue that the
ordinances unfairly focus only on labor contracts, while failing
to extend similar provisions to local governments' contract
negotiations for goods and services provided by private
third-parties. Unions representing local government employees
want the Legislature to require that any community in which COIN
ordinance requirements are imposed on labor negotiations must
also impose similar requirements on other contract negotiations.
Comments
1. Purpose of this bill. SB 331 advances the cause of
transparency in public contracting. Greater public scrutiny of
contracts negotiated by public agencies can improve outcomes.
However, some local governments have adopted "COIN" ordinances
that focus transparency requirements only on labor contracts
negotiated through the collective bargaining process. Problems
resulting from conflicts-of interest, unexpected costs, and
ill-considered contract provisions certainly are not exclusive
to local governments' labor contracts. As a result,
transparency requirements should not be limited to a single
interest group. SB 331 will establish parity in local
governments' contract transparency requirements by ensuring that
a jurisdiction that imposes openness requirements on labor
negotiations must apply a similar degree of openness to its
negotiations of contracts for goods and services provided by
private third-parties.
2. Elevating form over function. In theory, applying roughly
similar transparency requirements to all local government
contract negotiations may seem fair. However, in practice, it
is problematic to apply one-size-fits-all requirements to a wide
variety of contract negotiations that are not alike. The
exemptions from statutory open meeting requirements that state
law grants to labor contract negotiations do not apply to most
other types of local government contracts for goods and
services. This is not to suggest that favoritism, payoffs, or
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bad judgment can't influence local governments' contract awards
for goods and services. But, the problems with those contract
negotiations may not relate to a lack of public notice or
discussion in public hearings. For example, in contrast with
the collective bargaining process, the details of solicitations
for public works contracts are circulated well in advance of the
bidding process and contracts are typically awarded to the
lowest responsible bidder through a public process, with minimal
opportunities to alter the details of the contract. By applying
similar openness requirements on all local government contracts,
SB 331 may only achieve parity in form, while failing to address
the different policy responses that may be necessary to respond
to different types of undesirable contract negotiation
practices.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
SUPPORT: (Verified5/19/15)
AFSCME District Council 36
American Federation of State, County, and Municipal Employees
Association for Los Angeles Deputy Sheriffs
Association of Deputy District Attorneys
Association of Orange County Deputy Sheriffs
California Association of Professional Employees
California Professional Firefighters
Glendale City Employees Association
In the Public Trust
International Union of Operating Engineers, Local 501, AFL-CIO
LIUNA Local 777
LIUNA Local 792
Los Angeles Police Protective League
Los Angeles Probation Officers' Union
Orange County Employees Association
Orange County Professional Firefighters Association IAFF Local
3631
Organization of SMUD Employees
Peace Officers Research Association of California
Riverside Sheriffs Association
San Bernardino Public Employees Association
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San Diego County Court Employees Association
San Luis Obispo County Employees Association
United Domestic Workers of America, AFSCME Local 3930, AFL-CIO
OPPOSITION: (Verified5/19/15)
California Chamber of Commerce
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
5/20/15 17:16:09
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