BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                     SB 331  


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          Date of Hearing:  August 19, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 331  
          (Mendoza) - As Amended August 17, 2015


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          Yes


          SUMMARY:  This bill requires local agencies that have adopted a  
          Civic Openness in Negotiations (COIN) ordinance for their labor  
          contracts to use a similar process to evaluate, negotiate, and  
          approve specified goods or services contracts valued at $250,000  
          or more. Specifically, this bill:  









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          1)Enacts the Civic Reporting Openness in Negotiations Efficiency  
            Act, or CRONEY.



          2)Provides that CRONEY applies only to a city, county, city and  
            county, or special district (local agency) that has adopted a  
            COIN ordinance, which is effective and operative. CRONEY is  
            not required if the local agency suspends, repeals, or revokes  
            its COIN ordinance. 



          3)Provides that CRONEY is not applicable to any contract that is  
            required to respond to, recover from, or mitigate the effects  
            of a temporary public safety emergency or other state of  
            emergency, as specified.



          4)Provides that CRONEY applies to any contracts with a value of  
            at least $250,000, and to any contracts with a person or  
            entity, or related person or entity, with a cumulative value  
            of at least $250,000 within the fiscal year being negotiated  
            between the local agency, and any private person or entity  
            that seeks to provide services or goods to the local agency,  
            as specified.



          5)Specifies that the bill's provisions do not apply to a renewal  
            contract if the employees performing the services are covered  
            by a collective bargaining agreement that is governed by the  
            National Labor Relations Act.



          FISCAL EFFECT:








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          1)Unknown, but likely significant costs to impacted local  
            agencies for independent auditor reviews and required reports  
            for each impacted contract. These mandated costs are  
            potentially reimbursable by the state, but may fall under  
            Proposition 42.  Should local agencies seek reimbursement from  
            the Commission on State Mandates and prevail, the cost to the  
            state is potentially in the millions of dollars (GF)  
            statewide.


          2)Unknown, non-reimbursable costs to local agencies to comply  
            with new public disclosure and meeting requirements. These  
            costs would likely fall under Proposition 42 and, therefore,  
            are not reimbursable.


          COMMENTS:


          1)Purpose.  According to the author, "SB 331 will increase  
            transparency in public contracting by establishing the Civic  
            Reporting Openness in Negotiations Efficiency Act.  The bill  
            applies to local jurisdictions where a COIN has been approved  
            and will ensure that the same openness requirements apply to  
            all contracts, whether they are labor contracts or contracts  
            with private entities for goods and services.



          2)Background.  Orange County, Costa Mesa, Fullerton, and the  
            City of Beverly Hills have adopted what they call COIN  
            ordinances requiring that certain aspects of collective  
            bargaining engaged in by the city, county, or city and county  
            to be open to the public in an attempt to increase public  
            awareness and involvement in their labor contract  
            negotiations.  A COIN ordinance imposes various requirements  
            on a local government regarding its labor contract  








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            negotiations, including hiring an independent negotiator,  
            obtaining an independent analysis of the costs of contract  
            proposals, requiring public disclosure, within 24 hours, of  
            offers and counter-offers made during negotiations, as well as  
            other disclosure requirements.



          3)Arguments in Support.  AFSCME, AFL-CIO writes, "While some  
            transparency measures are already present during many of the  
            labor contracts in California, even in the absence of COIN,  
            private companies contracting with cities and counties for  
            public dollars are rarely held to the same standard.  If  
            municipalities are contracting with private entities for  
            public services, then taxpayers have a right to know how their  
            money is being used in private contracts; if taxpayers are  
            going to trust a for-profit company to provide vital services,  
            that company should be able to prove it can be trusted. SB 331  
            would bring maximum transparency to contract negotiations with  
            private entities for public services."



          4)Arguments in Opposition.  The Orange County Board of  
            Supervisors, in opposition, states, "SB 331 imposes far  
            greater restrictions on the Board's ability to conduct its  
            business than what is required of collective bargaining under  
            COIN, the most egregious of which would prohibit approval of  
            any contracts for no less than sixty days.  This proposed  
            state mandate on a local government would essentially stifle  
            the Board's primary responsibility to fund critical contracts  
            that keep county operations functioning?The mandates proposed  
            in        SB 331 will only lead to increased costs due to  
            delays in the contracting process and unreasonable  
            administrative burdens."



          5)Proposition 42.  Proposition 42 was passed by voters on June  








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            3, 2014, amended the state Constitution to require all local  
            governments to comply with the California Public Records Act  
            and the Ralph M. Brown Act and with any subsequent changes to  
            those Acts.  Proposition 42 also eliminated reimbursement to  
            local agencies for costs of complying with the California  
            Public Records Act and the Ralph M. Brown Act.



          6)Prior Legislation. 



             a)   AB 1333 (R. HernŠndez) of 2013 would have required a  
               local legislative body to adopt a resolution to either  
               exercise, or decline to exercise, an option to rescind an  
               "evergreen" contract or MOU with a total annual value of  
               $250,000.  AB 1333 was held in the Senate Governance and  
               Finance Committee.



             b)   AB 834 (HernŠndez) of 2011 was similar to AB 1333.  AB  
               834 failed passage on the Assembly floor. 






          


          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081












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