BILL ANALYSIS Ó
SB 1360
Page 1
Date of Hearing: June 15, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
SB
1360 (Bates) - As Amended March 31, 2016
SENATE VOTE: 36-0
SUBJECT: Local government: municipal service agreements: law
enforcement services.
SUMMARY: Creates parity for counties and cities that provide
law enforcement services to cities by requiring a city that
contracts with another city for law enforcement services to
charge all costs incurred in providing those services.
Specifically, this bill:
1)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 statutes governing municipal service
agreements to charge that city all the costs that are incurred
in providing those law enforcement services, except for any
costs that the city providing the services reasonably
determines are general overhead costs.
2)Defines "general overhead costs" to mean those costs that a
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city would incur regardless of whether or not it provided law
enforcement services pursuant to a contract or agreement to
the other city.
3)Requires any determination of general overhead costs made by a
city providing law enforcement services to be subject to
judicial review as to the reasonableness of that
determination.
4)Applies to contracts or agreements entered into, or renewed,
on and after January 1, 2017.
EXISTING LAW:
1)Allows local agencies to contract with other local agencies to
provide municipal services or functions, and requires such
agreements to be for "valuable consideration."
2)Requires a county that provides services to any city pursuant
to a contract to charge the city all those costs that are
incurred in providing the services.
3)Prohibits a county from charging a city contracting for
services, either as a direct or an indirect overhead charge,
any portion of those costs that are general overhead costs of
operation of the county government.
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4)Defines "general overhead costs" as those costs that a county
would incur regardless of whether or not it provided services
under contract to a city.
5)Requires any determination of general overhead costs to be
subject to court review as to the reasonableness of such
determination.
FISCAL EFFECT: None
COMMENTS:
1)Bill Summary. This bill aims to create parity for counties
and cities that provide law enforcement services to cities.
It requires a city that provides law enforcement services to
another city to charge that city all the costs that are
incurred in providing those law enforcement services, except
for costs that the city providing the services reasonably
determines are general overhead costs. General overhead costs
are defined 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." This
determination is subject to judicial review.
This bill applies to contracts or agreements entered into, or
renewed, on and after January 1, 2017. This bill is sponsored
by the Association of Orange County Deputy Sheriffs.
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2)Author's Statement. According to the author, "Different rules
apply to cities and counties when bidding for police service
contracts. Counties must charge all costs 'which are incurred
in providing the services so contracted or authorized,' while
cities need only charge 'valuable consideration.' Because
counties and cities are playing by two separate sets of rules,
counties are severely disadvantaged when bidding head-to-head
with cities for police service contracts.
"Residents of cities who bid police services below cost are
also burdened by the disparate treatment of cities and
counties. When a city gives a low bid to undercut a county's
bid, it is that city's taxpayers who get saddled with the
extra costs. Essentially, the bidding city's residents will
be forced to make up the difference between the cost of the
services provided and the amount of the bid. SB 1360
represents a commonsense approach toward ensuring that both
counties and cities are able to competitively bid law
enforcement contracts and ensures that all of the services
provided will be paid for by the city receiving services,
rather than the taxpayers of another municipality."
3)Background. Current law allows local agencies - including
counties and cities - to contract with each other for
municipal services and functions. Statutes governing this
authority require these agreements to be for "valuable
consideration," but do not further specify what this "valuable
consideration" must include. However, current law specifies
that, when counties provide services to cities, they must
charge all costs incurred in providing those services (with
the exception of any costs that can be attributed to services
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provided to all portions of the county).
This bill's sponsor, the Association of Orange County Deputy
Sheriffs, explains that these conflicting statutes allow
cities to pick and choose what they will charge and not charge
for and, therefore, to bid contracts at far lower prices than
counties.
This bill is modeled after statutes that govern what counties
must charge when providing services to cities, although it is
limited to law enforcement services only (as opposed to any
and all services a city might provide to another city).
4)Arguments in Support. The Association of Orange County Deputy
Sheriffs, sponsor of this bill, writes, "(W)e strongly support
SB 1360, which would create parity between counties and cities
who bid for municipal police services contracts?(Current law)
creates a lack of parity that advantages cities over counties
when both are bidding head-to-head for police service
contracts. SB 1360 would remedy this problem by simply
requiring cities to charge all those costs incurred in
providing the law enforcement services contract."
5)Arguments in Opposition. None on file.
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REGISTERED SUPPORT / OPPOSITION:
Support
Association of Orange County Deputy Sheriffs [SPONSOR]
Opposition
None on file
Analysis Prepared by:Angela Mapp / L. GOV. / (916)
319-3958