BILL ANALYSIS Ó
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. Hernández) 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 (Hernández) of 2011 was similar to AB 1333. AB
834 failed passage on the Assembly floor.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
SB 331
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