BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |SB 1360 |Hearing |4/27/16 |
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|Author: |Bates |Tax Levy: |No |
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|Version: |3/31/16 |Fiscal: |No |
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|Consultant|Weinberger |
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Local government: municipal service agreements: law
enforcement services
Prohibits a city that contracts with another city to provide
police services from charging for the overhead costs of police
protection that the city would incur in the absence of the
contract.
Background
State law allows a county or a city to provide police services
to a city that enters into a contract to receive those services
from the county or city.
State law requires a county that provides police services to any
city pursuant to a contract to charge the city all those costs
which are incurred in providing the police services (SB 747,
Ayala, 1983). A county is prohibited from charging a city
contracting for police service, either as a direct or an
indirect overhead charge, any portion of those costs which are
general overhead costs of operation of the county government.
General overhead costs are those costs which a county would
incur regardless of whether or not it provided police services
under contract to a city. State law requires that any
determination of general overhead costs must be subject to court
review as to the reasonableness of such determination.
SB 1360 (Bates) 3/31/16 Page 2
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By contrast, state law does not impose similar requirements on a
city that enters into a contract to provide police services to
another city. State law only requires that a contract between
two cities for providing police services must be for "valuable
consideration." Some county officials worry that, read broadly,
this language may allow a city police department to structure a
bid in ways that would give it an unfair advantage over a county
sheriff's office that is competing for a police services
contract. They want the Legislature to impose the same
requirements on cities' contracts for municipal police services
that current law already applies to counties' contracts.
Proposed Law
Senate Bill 1360 requires a city that provides law enforcement
services through its appropriate departments, boards,
commissions, officers, or employees to another city pursuant to
a contract or any other agreement authorized by specified
statutes must charge that city all the costs that are incurred
in providing those law enforcement services. SB 1360 prohibits
the costs charged from including any costs that the city
providing the services reasonably determines are general
overhead costs. The bill defines "general overhead costs" as
those costs that a city would incur regardless of whether or not
it provided law enforcement services pursuant to a contract or
agreement to the other city.
SB 1360 specifies that any determination of general overhead
costs made by a city providing law enforcement services shall be
subject to judicial review as to the reasonableness of that
determination.
The bill's provisions only apply to contracts or agreements
entered into, or renewed, on and after January 1, 2017.
State Revenue Impact
No estimate.
Comments
SB 1360 (Bates) 3/31/16 Page 3
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Purpose of the bill . SB 1360 creates a level playing field for
cities and counties that compete to provide police services to a
city through a contract. Because current law allows a city to
provide police protection services to another city without
limitation on the amount of overhead costs that can be
reimbursed under the contract, but does not allow counties to do
the same, counties have less flexibility in how they structure
their bids for municipal police services contracts. SB 1360
responds to this lack of parity by imposing on cities the same
restrictions that current law imposes on counties, prohibiting
them from recovering general overhead costs through a police
services contract.
Support and
Opposition (4/21/16)
Support : Association of Orange County Deputy Sheriffs.
Opposition : Unknown.
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