BILL ANALYSIS Ó
SB 682
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Date of Hearing: June 23, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
SB
682 (Leno) - As Amended May 5, 2015
As Proposed to be Amended
SENATE VOTE: 24-14
SUBJECT: COURTS: PERSONAL SERVICES CONTRACTS
KEY ISSUE: IN ORDER TO PROTECT THE INTEGRITY OF OUR COURTS AND
ENSURE THAT SCARCE JUDICIAL RESOURCES ARE SPENT EFFICIENTLY,
SHOULD TRIAL COURTS COMPLY WITH DUE DILIGENCE STANDARDS BEFORE
PRIVATIZING WORK THAT IS CURRENTLY OR CUSTOMARILY PERFORMED BY
TRIAL COURT EMPLOYEES?
SYNOPSIS
Unless specified conditions are satisfied, nearly all government
entities in California are restricted from contracting out
functions customarily done by public employees. These
requirements are designed to ensure that not only is the work
done cost-effectively, but also that the public interest in the
particular government function remains paramount. As a general
rule, work performed for the state must be done by state
employees, unless a proposed contract for personal services
meets specified criteria, including a clear demonstration of
cost savings. Schools and community college districts are also
required to comply with basically the same standards that apply
to the state. Most recently, the Legislature established
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similar due diligence standards for public libraries in AB 438
(Williams), Chap. 611, Stats. 2011. This bill, sponsored
jointly by the Service Employees International Union (SEIU), the
American Federation of State, County and Municipal Employees
(AFSCME), Laborers' Locals 777 and 792, and the Orange County
Employees Association, extends the same due diligence
protections to the trial courts and their employees, but with 11
exemptions to ensure that courts can function effectively and
efficiently in these still difficult budget times.
This bill is substantially similar to last year's AB 2332
(Wieckowski), which passed the Assembly, but was held in the
Senate Appropriations Committee, and AB 566 (Wieckowski), 2013,
which passed the Legislature but was vetoed by the Governor.
However, the bill has been narrowed to track much more closely
the language in the state agency contracting statute and to
address concerns raised by the Governor.
The bill is supported by many labor organizations, including the
California Labor Federation and the California State Sheriffs
Association. It is opposed by the Chamber of Commerce, the Los
Angeles Superior Court and, unless amended, by the Judicial
Council, which proposes amendments that would make it much
easier for the courts, as compared to state agencies, schools
and libraries, to contract out significant judicial branch
functions to private entities. The author has agreed to amend
the bill to address some, but not all, of the Judicial Council's
concerns.
SUMMARY: Requires courts to comply with specified requirements
before contracting out services that are currently or
customarily performed by trial court employees. Specifically,
this bill:
1)Provides that contracts for services currently or customarily
performed by trial court employees are permissible if all of
the following conditions are met:
a) The court clearly demonstrates that the contract will
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result in actual, overall cost savings to the court,
considering specified factors, as provided;
b) The contract may not be approved solely on the basis
that savings will result from lower contractor pay rates or
benefits, provided the contract is eligible for approval if
the contractor's wages are at the industry standard and do
not significantly undercut trial court pay rates;
c) The contract does not cause displacement of court
employees, as provided;
d) The contract savings are large enough to ensure they
will not be lost by various fluctuations during the
contract period;
e) The amount of the savings justifies the size and
duration of the contract;
f) The contract is awarded through a competitive bidding
process;
g) The contract provides for qualified staff, and the
contractor's hiring practices are nondiscriminatory;
h) The potential for future economic risk to the court from
future contract rate increases is minimal;
i) The contract is with a firm, as defined; and
j) The potential economic advantage of contracting out is
not outweighed by the public's interest in having the
function performed directly by the court.
2)Does not preclude a trial court or the Judicial Council from
adopting more restrictive rules regarding contracting of court
services.
3)Contracting is also permissible if one of the following
conditions is met:
a) Contract is for a new trial court function for which the
Legislature has specifically authorized the performance of
the services by independent contractors;
b) Contract is between a trial court and another trial
court or a local government entity for services to be
performed by employees of that trial court or local
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government entity;
c) Services contracted for cannot be satisfactorily
performed by court employees or are of such a highly
specialized or technical nature that necessary expertise
cannot be obtained from court employees;
d) Services are incidental to a contract for purchase of
property, except for contracts to operate equipment or
computers (other than service or maintenance agreements);
e) Contract is needed to protect against conflict of
interest or ensure independent unbiased findings;
f) Emergency situations in which contract is necessary for
immediate preservation of public health, welfare or safety;
g) Training courses when qualified instructors are not
available from court employees;
h) Contractor will provide equipment, materials, facilities
or support services that cannot feasibly be provided in the
location, except these will not be used to open closed
courthouses or for ongoing operation at new or reopened
courthouses;
i) Services are of such an urgent, temporary or occasional
nature that delay in hiring employees would frustrate their
very purpose, but this provision does not apply to court
reporters, except individual pro tempore court reporters
may be used as appropriate;
j) Contract is for services with individuals with
developmental disabilities pursuant to rehabilitation
programs; or
aa) Contract is for services of court interpreters.
4)Requires each trial court that enters into a personal services
contract between July 1, 2015, and December 31, 2015, with a
term beyond March 31, 2016, to report to the Department of
Finance and the Legislature by February 1, 2016, on the
contract, as provided.
5)Contains a severability clause.
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EXISTING LAW:
1)Provides that employees of the state be appointed through the
civil service system. (Cal. Constitution, Article VII,
Section 1.)
2)Limits personal service contracts (contracting out) for work
done by state employees to when specified conditions are
satisfied, including:
a) The contracting state agency clearly demonstrates actual
overall savings;
b) The contract savings are not the result of lower
contractor pay rates or benefits, provided the contract is
eligible for approval if the contractor's wages are at the
industry standard and do not undercut existing pay rates;
c) The contract does not cause displacement of state civil
service employees;
d) The amount of the savings clearly justifies the
agreement;
e) The contract is awarded through a competitive bidding
process;
f) The potential for future economic risk for the state
from the contractor is minimal; and
g) The potential economic advantage of contracting out is
not outweighed by the public's interest in having a
particular function performed directly by the state.
(Government Code Section 19130(a).)
3)Permits contracting out of work done by state employees in
limited specified situations, including new state functions,
services that cannot be performed within civil service, and
emergency situations. (Government Code Section 19130(b).)
4)Prevents a school district or community college district from
contracting out services currently or customarily performed by
classified employees, unless conditions similar to those set
out in #2), above, are satisfied. (Education Code Sections
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45103.1 and 88003.1.)
5)Prevents, until January 1, 2019, a city or library district
from withdrawing from a county free library system and
operating libraries with a private contractor, unless
conditions similar to #2), above, are satisfied. (Education
Code Section 19104.5.)
6)Allows a county to contract out for "special services," as
provided. (Government Code Section 31000.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: Nearly all government entities in California are
restricted from contracting out functions that are customarily
done by public employees, unless specified conditions are
satisfied. These requirements are designed to ensure not only
that work is done cost-effectively, but also that the public
interest in government activities remains paramount. As a
general rule, work performed for the state must be done by state
employees, unless the proposed contract for personal services
meets specified criteria, including a clear demonstration of
cost savings. Schools, community college districts and public
libraries are also required to comply with generally the same
standards that apply to the state. (See AB 3336 (Ryan), Chap.
1057, Stats. 1982; SB 1419 (Alarcon), Chap. 894, Stats. 2002; AB
438 (Williams), Chap. 611, Stats. 2011.) This bill, jointly
sponsored by SEIU, AFSCME, Laborers' Locals 777 and 792, and the
Orange County Employees Association, seeks to extend these same
due diligence protections to the trial courts. This bill is
similar to last year's AB 2332 (Wieckowski), which passed the
Assembly, but was held in Senate Appropriations Committee, and
AB 566 (Wieckowski), 2013, which passed the Legislature, but was
vetoed by the Governor.
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The author writes that this bill is necessary to not only ensure
that scarce court resources are used as effectively and
efficiently as possible, but also to protect the very integrity
of the judicial process:
As a result of recent budget cuts to the trial courts, some
courts have sought alternative ways to provide critically
important services to the public, including privatizing
some of the most sensitive services that help preserve the
integrity of our impartial trial court system.
In all sectors of government, California requires that some
due diligence standards be satisfied prior to the
privatization of public services. However, trial courts
are currently exempt from similar accountability measures.
Given the critical importance of the trial courts and the
sensitivity of the information that is processed and
maintained in confidence by the courts and their employees,
trial courts should be held to at least the same standards
of due diligence as other public entities.
SB 682 requires the courts to show they used due diligence
in deciding to employ a private contractor to perform court
services that are currently or have customarily been
performed by trial court employees. . . .
The purpose of this bill is not to infringe upon the
independent discretion of the trial courts. Rather, it is
to ensure that trial courts meet the same common-sense
standards when contracting out for services as all other
governmental agencies in this state.
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Under this bill, if a trial court intends to privatize a
function that is currently or customarily performed by trial
court employees, the court must first:
Demonstrate cost savings: The court must clearly demonstrate
that the contract will result in actual, overall cost savings
to the court.
Show savings not solely from reduced wages and that employees
will not be displaced: The contract savings may not be solely
the result of lower contractor pay rates or benefits, but may
be approved if the contractor's wages are at the industry
standard. The contract may not cause existing trial court
employees to be displaced.
Use competitive bidding: The contract must be awarded through
competitive bidding.
Provide for staff qualifications and hiring: The contract
must provide qualifications of staff, and the contractor's
hiring practices must be nondiscriminatory.
Public interest: The potential economic advantage of the
contract is not outweighed by the public's interest in having
the function performed directly by the court.
The bill's author notes that these requirements are necessary
and appropriate to ensure that any private contract both results
in actual savings for the court and retains the integrity of the
judicial system. One of the sponsors, AFSCME, states succinctly
that these requirements provide "an efficient way of evaluating
whether privatizing trial court jobs is in the best interest of
the state."
These Requirements Are Nearly Identical to Requirements that
Already Apply Today to State Agencies and to Schools, Community
Colleges, and Libraries. The due diligence requirements in this
bill are, almost verbatim, identical to requirements in current
law that apply to all state agencies, as well as schools,
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community colleges and libraries. Like the courts, these
entities (with the exception of the libraries) receive the bulk
of their funding from and through the state.
Indeed, contracting out work performed by state employees is
even more limited than what is proposed by this bill. The state
constitution and case law make clear that, before considering
the due diligence standards, work done by state employees can
only be contracted out to private companies if it fits into
certain allowable exceptions. One exception is that the work
represents a legislatively created "new state function" that
does not displace existing civil service functions.
(Professional Engineers v. Dep't of Transportation (1993) 13
Cal.App.4th 585, 593.) Another exception applies when the
"nature of the services" is such that they cannot be performed
adequately, satisfactorily or competently by state employees.
(Burum v. State Compensation Ins. Fund (1947) Cal.2d 575, 582.)
Similar to restrictions on state agencies, the Attorney General
has opined that general law counties (the vast majority of
California counties are general law counties, although the
larger ones tend to be charter counties), may not, solely to
save money, contract out personal services for work that is
provided by civil service employees. (76 Ops. Cal. Atty. Gen.
86 (1993).) However, there is statutory authority to contract
out for enumerated "special services." But even when the
"special services" exception applies, only those employees who
are specifically trained, experienced and expert to perform
those services can be replaced with contract employees. Unlike
the limitation for general law counties, this bill does not, in
its current form, prevent courts from contracting out services
that are not "special services." It simply requires due
diligence standards before permitting courts to contract out
judicial functions.
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The Bill Provides Eleven Exemptions to Ensure That Courts Can
Operate Effectively and Efficiently. In order to ensure that
the trial courts can operate effectively, the bill provides
eleven exemptions to permit contracting out of court services
without having to go through the due diligence review outlined
above. These exemptions, which are similar to exemptions
provided to some other government entities, are:
Contracts with other governmental entities: Contracts between
a trial court and another trial court or a local government
entity for services to be performed by employees of that trial
court or local government entity;
New functions: Contracts for a new trial court function for
which the Legislature has authorized that services be
performed by independent contractors;
Technical services: Services contracted for that are of such
a highly specialized or technical nature that necessary
expertise cannot be obtained from court employees;
Purchase of property: Services incidental to a contract for
purchase of property, except for contracts to operate
equipment or computers (other than service or maintenance
agreements);
Conflict of interest: Contracts needed to protect against
conflict of interest or ensure independent unbiased findings;
Emergencies: Emergency situations;
Training: Training courses when qualified instructors not
available from court employees;
Difficult to access location: Contracts for provision of
equipment, materials or support services that cannot be
feasibly provided by the trial court in that location,
although this provision does not permit services to reopen a
closed courthouse or for the ongoing operation of a
courthouse;
Urgent, temporary or occasional services: Services that are
of such an urgent, temporary or occasional nature that delay
in hiring employees would frustrate their very purpose, but
this provision does not apply to court reporters; however,
individual pro tempore court reporters may be used as
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appropriate;
Developmentally disabled individuals: Contracts for services
with individuals with developmental disabilities pursuant to
rehabilitation programs; and
Court interpreters: Contracts for services of court
interpreters.
Now More Than Ever Scare Court Resources Must Be Expended
Prudently to Help Ensure Justice for All. Historically, trial
courts in California were county entities, funded by the
counties. In 1997, after significant problems came to light
with the county-based court funding model, the Legislature
passed the Lockyer-Isenberg Trial Court Funding Act, AB 233
(Escutia and Pringle), Chap. 850, Stats. 1997. Under that bill,
the state assumed responsibility for funding the courts and
helping ensure equal access to a quality judicial system
statewide. After the state took over funding, the courts
received significant funding increases and historically
underfunded courts saw greater increases. Unfortunately, the
recession forced significant reductions in state General Fund
support for the courts, but "one-time" fixes, backfills and new
revenues spared the court system the full brunt of the General
Fund reductions.
Nevertheless the state's trial courts and their employees, and
all court users in the state, have been experiencing tragic
reductions in court services and basic access to justice. Trial
courts have taken dramatic and painful steps to address the
budget cuts, including 1) closing courthouses and courtrooms,
some on selected days and others completely; 2) laying off or
furloughing employees; and 3) reducing services, including
substantial cuts to self-help and family law facilitator
assistance, and providing fewer court reporters and court
interpreters. While this year's budget increased trial court
funding by $129 million and the 2015-16 budget includes an
additional $166 million for the trial courts on top of last
year's $129 million, one-time fixes have expired and large
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reserves have been eliminated. As a result, courts could still
be looking for additional ways to reduce expenditures, unless
there is an infusion of additional funds. Courts may therefore
understandably be tempted to consider contracting out important
court functions in an attempt to reduce expenses. If this is
the case, it is important to ensure that such contracting out
will actually save the courts money and continue to strongly
protect the integrity of the judicial system. According to the
author, this bill proposes to do exactly that.
Concerns Raised by Recent State Audits of Judicial Branch
Procurements. The 2011 public safety budget trailer bill, SB 92
(Committee on Budget and Fiscal Review), Chap. 36, Stats. 2011,
mandated that the State Auditor audit the trial courts and the
Administrative Office of the Courts (AOC, since renamed by the
Judicial Council as the Judicial Council) on a regular basis.
Two years ago, the Auditor did a pilot audit on the goods and
services procurement practices of six trial courts and reported
its findings in Judicial Branch Procurement: Six Superior Courts
Generally Complied With the Judicial Branch Contracting Law, but
They Could Improve Some Policies and Practices (March 2013).
While noting that the six courts audited - Napa, Orange,
Sacramento, Stanislaus, Sutter and Yuba - "generally
demonstrated good contracting practices," the Auditor uncovered
instances where courts used sole-source contracts for which
there was no justification, managers approved contracts for
amounts above their authority, and inaccurate cost data were
reported. The audit summed up the problems: "Each of the
issues described here appears to be an isolated lapse in policy
rather than a systemic failure. However, when courts do not
comply with the judicial contracting manual and other state
procurement requirements, they risk not receiving the best price
for goods and services." (Id. at 3.) Creating more
transparency and more accountability before contracting out for
services should help ensure that the courts receive the best
price.
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The State Auditor again audited the AOC and the courts in late
2013 and again discovered procurement problems, noting that some
courts "did not consistently use a competitive process to
procure goods and services. . . . [F]our of the judicial
entities could not demonstrate that they competitively procured
goods or services in five of the 15 instances we reviewed for
which competition was required." The State Auditor also found
that the AOC did not always correctly evaluate bids for
competitive procurements and "the AOC and the judicial entities
did not properly document their justifications for using
sole-source procurements rather than a competitive process in
nine instances totaling $1.6 million." (State Auditor,
Semiannual Reports to the Legislature Are of Limited Usefulness,
Information Systems Have Weak Controls, and Certain Improvements
in Procurement Practices Are Needed 2 (December 2013).)
In that same audit, the State Auditor uncovered "pervasive
weaknesses in the general controls-which include the key control
categories of security management, access controls, and
contingency planning- that affect the AOC's and superior courts'
information systems, including Oracle and Phoenix. We also
noted deficiencies in the Phoenix application's general controls
related to access and business process application controls
related to procurement and accounts payable activities. The
results of our review indicate that there is an unacceptably
high risk that reliance on data from the applications the AOC
and superior courts currently use to perform their day-to-day
operations could lead to an incorrect or improper conclusion."
(State Auditor letter to the Governor, President pro Tempore of
the Senate and Speaker of the Assembly (March 2014).) The State
Auditor was concerned enough about these deficiencies to send a
special letter to the Governor and legislative leaders about
this just last year: "We are issuing this letter because we
believe it is important that the governor and Legislature be
made aware of the specific details related to the weaknesses we
identified." (Id.)
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In the most recent audit completed at the end of last year, the
State Auditor again found problems with procurement and found
that none of the courts audited "fully complied with the
judicial contracting manual's guidance." (State Auditor,
Judicial Branch Procurement: Five Superior Courts Did Not
Consistently Follow Judicial Branch Contracting Practices 1
(Nov. 2013).) The Auditor discovered that two of the courts
audited (Fresno and Yuba) made contract payments without proper
authorization and one court -- Alameda -- failed to authorize
any payment reviewed by the Auditor, which resulted in an
overpayment to one vendor. Additionally all five courts audited
-- the above three, along with Butte and San Luis Obispo --
failed to properly document justification for noncompetitive
(sole-source) contracting. Without the documentation, there is
no guarantee that these contracts are reasonably or fairly
priced. (Id.)
Placer Court Has Contracted Out All of Its Court Reporting,
Although it is Unclear if There Are Any Savings. In 2012, the
Placer Superior Court went so far as to lay off all its court
reporters and contract out all of their work to private court
reporters. The Placer Court states that the contract resulted
in approximately $600,000 in savings in the 2013-14 fiscal year.
However, according to the sponsors, court employees agreed to
reduce their wages and benefits to the level of the private
contract and attain the $600,000 annual savings, but the Placer
Court nevertheless pursued the private contract even though
there were apparently no longer savings. The Placer Court
disputes the claims and believes that the contract resulted in
overall savings to the court.
Additionally, the contract has not increased either the number
or type of cases for which court reporters are present. Thus,
court reporting in all cases in Placer County, including
juvenile court cases, which are closed to the public, is now
performed by a private, for-profit company. Given the
questionable savings, lack of increased court reporter coverage,
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and the critical and sensitive nature of making the official
record, it is reasonable to question whether this private
contract was actually in the public's best interest. This bill
would help ensure that future contracts of this sort not only
save money for the courts, but most importantly, are also in the
public's interest.
In Order to Protect the Integrity of Our Courts, It Could Be
Reasonably Argued the Due Diligence Standards Need to Be Even
Higher Than in Other Areas of Government, Although,
Understanding the Budget Pressures on the Courts, This Bill
Currently Keeps the Same Standards. Given the importance of the
courts as a cornerstone of our democracy, sponsor SEIU states
that the level of due diligence necessary before trial court
services can be privatized should be higher than for other
government entities:
Being a nation of laws, a fair and impartial judicial
system that is accessible to all is a critical underpinning
of democracy and is fundamental to the success of a
civilized society.
Trial court services represent a "public good," which are
most effectively delivered by government and public
employees. SB 682 correctly places the burden of altering
one of the most essential public services on those
advocating it. Additionally, profit should never be
associated with any aspect of fair review and rights to
redress in an impartial judicial system that should be
accessible to all people.
As noted, however, this bill does not mandate a higher standard
to be realized before important court functions can be
privatized. It simply requires the same due diligence to be
used that is already required for other government functions.
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Similar Legislation Has Stalled in the Last Two Years. Last
year, AB 2332 (Wieckowski), which was similar to this bill,
passed the Assembly and the Senate Judiciary Committee, but was
held on the Senate Appropriations Committee suspense file. In
2013, the Governor vetoed AB 566 (Wieckowski), which also was
similar to this bill. In his veto message, the Governor stated:
I agree with the author that decisions to change the way
court services are provided should be carefully evaluated
to ensure they are both fair and cost-effective. However,
this measure goes too far. It requires California's courts
to meet overly detailed and - in some cases - nearly
impossible requirements when entering into or renewing
certain contracts. Other provisions are unclear and will
lead to confusion about what services may or may not be
subject to this measure.
The courts, like many of our governmental agencies, are
under tremendous funding pressure and face the challenge of
doing their work at a lower cost. I am unwilling to
restrict the flexibility of our courts, as specified in
this bill, as they face these challenges.
This bill seeks to address the Governor's concerns -- and the
issues in the Senate Appropriations Committee -- by increasing
the exemptions, narrowing the scope of contracts to which the
bill applies, and making the requirements of the bill nearly
identical to the limitations that today apply to state agencies.
For example, like existing state agency statute -- Government
Code Section 19130 -- this bill requires the trial court to
clearly demonstrate that the contract will result in actual
overall cost savings to the trial court, as specified. Unlike
AB 2332 and AB 566, however, this bill does not additionally
require that the actual cost savings must be for the duration of
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the entire contract as compared with the trial court's actual
costs of providing the same services. Additionally, unlike its
predecessors, this bill does not impose additional standards for
contracts over $100,000.
Judicial Council Opposes the Bill Unless Amended and its
Proposed Amendments Would Significantly Reduce the Effect of the
Bill and Significantly Depart From the Contracting Limitations
that Apply to Other State Agencies. The Judicial Council
opposes the bill because it would "severely hamper the trial
courts' ability to contract for personal services," and requests
amendments which would greatly change the scope of the bill and
the personal services to which the law would apply. The
proposed amendments would also create a contracting rule that
would be substantially different from the rules that now apply
to state agencies, schools and libraries. As discussed above,
the current version of the bill is almost identical to the law
that applies to state agencies. The Judicial Council requests
amendments that would completely change that and greatly expand,
from the current version of the bill, the courts' ability to
privatize key court functions.
The key concerns raised by Judicial Council are that the bill:
1) is too prescriptive and will make it impossible to contract
out for services; 2) has language applying to services
"currently or customarily" performed by trial court employees
that is vague and could impact existing contracts when they come
up for renewal or extension; 3) inhibits a court's ability to
manage its staff and resources; 4) reduces local control; 5)
conflicts with the Judicial Branch Contracting Manual; and 6)
affects circumstances that are more appropriately addressed
through collective bargaining at the local level.
In particular, the Judicial Council believes that the bill's
language, applying to contracts for services currently or
customarily performed by trial court employees is problematic
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because the term customarily is not defined in the bill and
could be read to bring back in all sorts of services that have
been contracted out for years. The Judicial Council requests
the word customarily be deleted or that all existing contracts
be "grandfathered in."
The author responds that the word "customarily" has a settled
legal meaning, defined as "usually, habitually, according to the
customs, general practice or usual order of things, regularly."
(Jones v. Robertson (1947) 79 Cal.App.2d 813, 818-19; Black's
Law Dictionary 462 (4th ed. 1951).) Additionally, the word
appears in similar statutes without a definition (Education Code
Sections 45103.1, 88003.1), so adding a definition of
"customarily" in this bill would raise questions about whether
the word means something different than what it means in the
other statutes. Moreover, continues the author, the bill was
amended in the Senate specifically to remove renewals and
extensions from the bill, making clear the bill does not apply
to existing contracts. However, an explicit grandfathering
clause would create "evergreen" contracts, which could allow
existing contracts to exist in perpetuity without review. In
the past few years, the Legislature has taken action to either
eliminate or reduce the potential for these contracts. The
author writes that "[a]llowing them in the judicial branch is
particularly imprudent given the critical nature of trial court
services and because the
branch has a poor history of managing contracts to ensure
quality services and containing costs."
Proposed Amendment: The author does concede that one of
Judicial Council's requested amendments makes the bill better
and agrees to amend the bill accordingly. Currently the bill
exempts any contract between a trial court and another trial
court or a local government entity from the due diligence
standards. However, this exemption is too narrow and would not
permit a court to contract with the, say, Judicial Council for
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the provision of various services or the Franchise Tax Board for
assistance with debt collection. Therefore, the author rightly
proposes to eliminate the word "local" from that provision and
allow courts to contract with all government entities without
having to comply with the due diligence requirements. This is
accomplished by the following amendments:
1. On page 4, line 10, delete "local"
2. On page 4, line 11, delete "local"
ARGUMENTS IN SUPPORT: In support of the bill, the California
Labor Federation writes:
When entities contract out, oftentimes there are sacrifices
made in the pursuit of cost savings. Outsourcing can
result in less accountability, public access, and
transparency. Such practices can lead to substantially
reduced wages, increasing demand for taxpayer funded public
assistance. Public interest becomes secondary to profit
maximization when for-profit corporations are responsible
for delivery of public services.
California requires due diligence standards be satisfied in
all sectors of government prior to privatization of public
services. However, trial courts are exempt from even this
minimum standard, which applies to other public entities.
Privatization of court services means that justice truly is
in the hands of private contractors whose primary concern
is profits for shareholders over fairness to the public.
For these reasons it is essential to have safeguards in the
law protecting the public interest.
Laborers' Locals 777 & 792 add their concerns that critically
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important court services, often involving confidential
information, should not be privatized just potentially to save
money, at the expense of the justice system:
As a result of substantial budget cuts to the trial courts,
and as a means to reduce costs, some courts have begun
providing or are considering providing critically important
services to the public via private services. This includes
privatizing the handling and maintenance of private,
confidential and sensitive information contained in
official court records. Given the important work done by
the trial courts, the sensitivity of the information that
is processes and maintained, and the sanctity of the rights
of public court consumers, the contracting out of court
work should never be used as a cost saving measure.
ARGUMENTS IN OPPOSITION: In opposition to the bill, the Los
Angeles Superior Court writes:
The Legislature has established a decentralized system of
trial court management that appropriately provides for
countywide administration of the courts, with local
personnel plans and with local control and discretion over
trial court management. Within the constraints of the
California Judicial Branch Contract Law, the Trial Court
Employment Protection and Governance Act, and local
employee bargaining agreements, each local trial court has
the responsibility and the authority to decide when and to
what extent contracting for services is the most effective,
efficient and responsible use of resources. SB 682 would
contravene this well-considered approach, and would
effectively substitute overly broad statewide limitations
on contracts for personal services.
Adds the California Chamber of Commerce:
SB 682
Page 21
A functioning judicial system is important for all members
of the public, including businesses. . . .
SB 682 would restrict a trial court from utilizing a
private contractor for duties that are "currently or
customarily" performed by trial court employees, unless the
trial court can "clearly demonstrate" actual cost savings,
not including existing overhead costs or contractors' lower
wages or benefits. This provision restricts courts from
using their reduced budgets in the most efficient manner
possible in order to provide necessary services for all
members of the public, and will potentially interfere with
existing contracts. We believe the judicial branch is in
the best position to determine how to balance the needs of
the public with their existing budget, including whether
private contractors are necessary.
REGISTERED SUPPORT / OPPOSITION:
Support
American Federation of State, County and Municipal Employees,
AFL-CIO (co-sponsor)
Laborers' Locals 777 and 792 (co-sponsor)
Orange County Employees Association (co-sponsor)
Service Employees International Union (co-sponsor)
California Court Reporters Association
California Labor Federation
California Official Court Reporters Association
California Professional Firefighters
California State Sheriffs' Association
SB 682
Page 22
Glendale City Employees Association
Organization of SMUD Employees
Professional and Technical Engineers, IFPTE Local 21
San Bernardino Public Employees Association
San Diego County Court Employees Association
San Luis Obispo County Employees Association
Opposition
California Chamber of Commerce
Judicial Council (unless amended)
Los Angeles Superior Court
Analysis Prepared by:Leora Gershenzon / JUD. / (916) 319-2334