BILL ANALYSIS �
AB 1344
Page 1
ASSEMBLY THIRD READING
AB 1344 (Feuer and Alejo)
As Amended May 27, 2011
Majority vote
LOCAL GOVERNMENT 7-2 ELECTIONS 6-0
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|Ayes:|Smyth, Alejo, Bradford, |Ayes:|Fong, Logue, Bonilla, |
| |Campos, Davis, Gordon, | |Gatto, Swanson, Valadao |
| |Hueso | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Knight, Norby | | |
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Donnelly, Gatto, | | |
| |Hall, Hill, Lara, | | |
| |Mitchell, Nielsen, Norby, | | |
| |Solorio, Wagner | | |
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SUMMARY : Prohibits, on or after January 2, 2012, any contract
executed or renewed between a local agency and an excluded
employee from including an automatic renewal of the contract if
the contract provides for an automatic increase in compensation
that exceeds a cost-of-living adjustment, an automatic increase in
compensation that is linked to another contract, and a maximum
cash settlement that exceeds the amounts provided for in statutory
provisions governing employment contracts. Specifically, this
bill :
1)Prohibits, on or after January 2, 2012, any contract executed or
renewed between a city; county; charter city; charter county;
town; school district; municipal corporation; district;
political subdivision; any board, commission or agency thereof;
or, other local public agency (local agency) and an excluded
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employee from including an automatic renewal of the if the
contract provides for an automatic increase in compensation that
exceeds a cost-of-living adjustment, an automatic increase in
compensation that is linked to another contract, and a maximum
cash settlement that exceeds the amounts provided for in
statutory provisions governing employment contracts.
2)Defines "compensation" to mean any of the following:
a) Annual salary or stipend;
b) A local agency's payments to the filer's deferred
compensation or defined benefit plans;
c) Automobile and equipment allowances;
d) Supplemental incentive and bonus payments; and,
e) A local agency's payments to the filer that are in excess
of the standard benefits the local agency offers for all
other employees.
3)Defines "cost-of-living" to mean the California Consumer Price
Index for urban Wage Earners and Clerical Workers as calculated
by the Department of Industrial Relations.
4)Defines "excluded employee" to mean any person who is or will be
employed by, and report directly to, the legislative body of a
local agency and who is not subject to the Meyers-Milias-Brown
Act, and includes any person who performs governmental duties
for a local agency pursuant to a contract with that local agency
and any person who is considered an
at-will employee.
5)Requires a city charter or amendments to a city charter proposed
by a charter commission to be submitted to the voters at an
established statewide general, statewide primary, or regularly
scheduled municipal election date provided there are at least 95
days before the election.
6)Authorizes the governing body of a city to submit a charter
proposal, amendments to a charter, repeal of a charter, or
recodification of a charter, whether proposed by the governing
body or by petition, to the voters for adoption at the next
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established statewide general, statewide primary, or regularly
scheduled municipal election date provided there are at least 88
days before the election.
7)Requires a proposal to adopt or amend a city charter to include
in the ballot description an enumeration of new city powers that
would result with the adoption of the charter, including, but
not limited to, whether the city council will have the power to
raise its own compensation and the compensation of other city
officials without voter approval under the charter.
8)Requires an employee or officer of a local agency who is
convicted of a crime involving an abuse of his or her office or
position to pay restitution to the local agency that expended
public funds for the legal criminal defense of that officer or
employee.
9)Requires the legislative body of a local agency to post at least
72 hours in advance the agenda for a regular meeting on the
local agency's Internet Web site if the local agency has one and
if the legislative body is one of the following:
a) The governing body of a local agency or any other local
body created by state or federal statute; or,
b) A commission, committee, board, or other body of a local
agency, whether permanent or temporary, decisionmaking or
advisory, created by charter, ordinance, resolution, or
formal action of a legislative body if the members are
compensated for their appearance and if one or more of the
members also are members of a legislative body of a local
agency or any other local body created by state or federal
statute. However, advisory committees, composed solely of
the members of the legislative body that are less than a
quorum of the legislative body are not legislative bodies for
purposes of these provisions, except that standing committees
of a legislative body, irrespective of their composition,
which have a continuing subject matter jurisdiction, or a
meeting schedule fixed by charter, ordinance, resolution, or
formal action of a legislative body are legislative bodies
for purposes of these provisions.
10)Requires the legislative body of a local agency to post at
least 24 hours in advance the notice and agenda for a special
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meeting on the local agency's Internet Web site if the local
agency has one and if the legislative body is one of the
following:
a) The governing body of a local agency or any other local
body created by state or federal statute; or,
b) A commission, committee, board, or other body of a local
agency, whether permanent or temporary, decisionmaking or
advisory, created by charter, ordinance, resolution, or
formal action of a legislative body if the members are
compensated for their appearance and if one or more of the
members also are members of a legislative body of a local
agency or any other local body created by state or federal
statute. However, advisory committees, composed solely of
the members of the legislative body that are less than a
quorum of the legislative body are not legislative bodies for
purposes of these provisions, except that standing committees
of a legislative body, irrespective of their composition,
which have a continuing subject matter jurisdiction, or a
meeting schedule fixed by charter, ordinance, resolution, or
formal action of a legislative body are legislative bodies
for purposes of these provisions.
11)Declares these provisions are a statewide concern and apply to
all counties and cities, including charter counties, charter
cities, and charter cities and counties.
12)Declares these provisions are severable.
EXISTING LAW :
1)Provides, under the Meyers-Milias-Brown Act, that collective
bargaining and representation procedures generally do not apply
to executive employees, such as county administrators, city
managers, special district managers, school superintendents,
community college presidents that are employed by, and report
directly to, local elected governing boards.
2)Requires all contracts of employment between an employee and a
local agency employer to include a provision that provides,
regardless of the term of the contract, if the contract is
terminated, the maximum cash settlement an employee may receive
is required to be an amount equal to the monthly salary of the
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employee multiplied by the number of months left on the
unexpired term of the contract. However, if the unexpired term
of the contract is greater than 18 months, the maximum cash
settlement is required to be an amount equal to the monthly
salary of the employee multiplied by 18.
3)Requires, under the Ralph M. Brown Act (Brown Act), that all
meetings of a legislative body of a local agency be open and
public and all persons be permitted to attend unless a closed
session is authorized.
4)Requires, at least 72 hours before a regular meeting, the
legislative body of the local agency, or its designee, to post
an agenda containing a brief general description of each item of
business to be transacted or discussed at the meeting, including
items to be discussed in closed session.
5)Requires, at least 24 hours before a special meeting, the
legislative body of the local agency to deliver written notice
and an agenda to each member of the legislative body and to each
local newspaper of general circulation and radio or television
state requesting notice in writing.
6)Requires, at least one hour before an emergency meeting, the
presiding officer of the legislative body or designee to notify
each local newspaper of general circulation and radio or
television station that has requested notice of special
meetings. If telephone services are not functioning, the notice
requirements for an emergency meeting are required to be deemed
waived and the legislative body or designee is required to
notify those newspapers, radio stations, or television stations
of the fact an emergency meeting was held, the purpose of the
meeting, and any action taken.
7)Requires, at or near the time the presiding officer or designee
notifies the members of the legislative body of the dire
emergency meeting, the presiding officer or designee to notify
each local newspaper of general circulation and radio or
television station that has requested notice of special
meetings. If telephone services are not functioning, the notice
requirements for a dire emergency meeting are required to be
deemed waived and the legislative body or designee is required
to notify those newspapers, radio stations, or television
stations of the fact a dire emergency meeting was held, the
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purpose of the meeting, and any action taken.
8)Authorizes a legislative body of a local agency to hold closed
sessions with the local agency's designated representatives
regarding the salaries, salary schedules, or compensation paid
in the form of fringe benefits of its represented and
unrepresented employees, and, for represented employees, any
other matter within the statutorily provided scope of
representation.
9)Prohibits closed sessions from including final action on the
proposed compensation of one or more unrepresented employees.
10)Finds and declares that in enacting the Public Records Act, the
Legislature, mindful of the right of individuals to privacy,
that access to information concerning the conduct of the
people's business is a fundamental and necessary right of every
person in this state.
11)Declares that every employment contract between a state or
local agency and any public official or public employee is a
public record.
12)Requires city and county charter proposals to be submitted to
the voters at either a special election called for that purpose,
at any established municipal election date, or at any
established election date provided pursuant to statute, provided
there are at least 88 days before the election.
13)Requires a city charter proposal prepared by the charter
commission, after it has been filed in the office of the clerk
of the governing body of the city, to be submitted to the voters
of the city at either a special election called within 14 days
by the governing body for that purpose to be conducted at least
95 days after the date the special election is called or at the
next established municipal election date or at the next
established statewide election date, provided there are at least
95 days before the election.
14)Authorizes, as an alternative, the governing body of any city,
on its own motion, to propose or cause to be proposed, amend or
cause to be amended, or repeal or cause to be repealed a charter
and to submit the proposal for adoption, or the amendments or
repeal thereof, to the voters at either a special election
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called for that purpose or at any established municipal election
date or at any established election date, provided there are at
least 88 days before the election.
15)Establishes penalties for misuse of public resources for
falsifying expense reporting, including, but not limited to,
loss of reimbursement privileges, restitution, civil penalties
for misuse of public resources, and prosecution for misuse of
public resources.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, there is no state cost to the bill.
COMMENTS : According to the author, the scandal surrounding the
City of Bell in 2010 exposed deficiencies in existing law that
must be addressed to ensure greater transparency and so voters
have confidence that taxpayer dollars are being used wisely. AB
1344 (Feuer), the author says, targets practices exploited by some
local governments that inappropriately even extravagantly rewarded
elected officials and top executive officers outside of public
view. Requiring basic good governance measures as they relate to
compensation practices, the author says, provides, to the maximum
extent possible, the public with the opportunity to be informed
and comment on local compensation-setting practices.
The Meyers-Milias-Brown Act governs local governments' relations
with their employees and portions of the Education Code govern
school districts and community college districts' employee
relations. These collective bargaining and representation
procedures generally do not apply to executive employees - county
administrators, city managers, special district managers, school
superintendents, community college presidents - who are employed
by, and report directly to, local elected governing boards.
Under the Brown Act, unrepresented employee compensation is not an
allowed closed session topic. However, a particular employee's
performance evaluation can be considered in a closed session so
long as the closed session is appropriately noticed.
The governing bodies of local agencies are required to ratify
their executive employees' contracts of employment in open session
and reflect those decisions in their minutes. Copies of these
employment contracts and settlement agreements must be publicly
available. When a contract with an executive employee is
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terminated, the maximum cash settlement a local agency can pay is
an amount equal to 18 months' salary. These provisions apply to
general law counties, general law cities, special districts,
school districts, and community college districts.
The California Public Records Act (PRA) requires public records to
be open to inspection during office hours and gives every person a
right to inspect public records, with specific exceptions. The
PRA also provides the procedures for requesting copies of public
records. Among the specific exemptions are employment contracts
between public agencies and public officials or employees.
The California Constitution gives cities the power to become
charter cities. The benefit of becoming a charter city is charter
cities have supreme authority over "municipal affairs." In other
words, a charter city's law concerning a municipal affair will
trump a state law governing the same topic. Personnel matters for
the most part are deemed a "municipal affair" and are under the
authority of the charter entity.
However, employee compensation procedures set forth in the
Meyers-Milias-Brown Act apply to charter cities and counties. In
Voters for Responsible Retirement v. Board of Supervisors (1994) 8
Cal.4th 765, the California Supreme Court ruled: "It is
indisputable that the procedures set forth in the
�Meyers-Milias-Brown Act] are a matter of statewide concern, and
are preemptive of contradictory local labor-management procedures.
(International Brotherhood of Electrical Workers v. City of
Gridley (1983) 34 Cal.3d 191, 202)" (Id. At 781). In addition, in
People ex rel. Seal Beach Police Officers Assn. v. City of Seal
Beach (1984) 36 Cal.3d 591, the California Supreme Court stated:
"We emphasize there is a clear distinction between the substance
of a public employee labor issue and the procedure by which it is
resolved. Thus there is no question that 'salaries of local
employees of a charter city constitute municipal affairs and are
not subject to general laws.' �Sonoma County Organization of
Public Employees v. County of Sonoma (1979) 23 Cal.3d 296, 317.]
Nevertheless, the process by which salaries are fixed is obviously
a matter of statewide concern ?" (Id. at 600-601, fn 11).
The Legislature may wish to consider whether the three contracting
practices banned by AB 1344 (Feuer) are procedural or substantive.
Prohibiting automatic contract renewals that provide for an
automatic increase in compensation that exceeds a cost-of-living
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adjustment and automatic compensation increases linked to other
contracts are probably procedural requirements. Putting a limit
on the amount of settlement payments might be substantive and,
thus, not allowed to be governed by state statute for purposes of
charter cities and counties.
City charter and city charter amendment proposals can originate in
one of three fashions: a charter commission; the governing body
of the city; or, by a petition of the voters. For a charter
commission, the proposed charter is required to be submitted to
the voters of the city at either a special election called within
14 days by the governing body for that purpose to be conducted at
least 95 days after the date the special election is called, or at
the next established municipal election date or at the next
established election date, provided there are at least 95 days
before the election. A governing body, on its own motion, is
authorized to propose or cause to be proposed, amend or cause to
be amended, or repeal or cause to be repealed, a charter and to
submit the proposal to the voters at either a special election
called for that purpose or at any established municipal election
date or at any established election date, provided there are at
least 88 days before the election. Petitions from voters for a
charter proposal are submitted to the city council for placement
on the ballot at an election on a date to be determined by the
city council. These provisions apply to general law cities.
In an apparent response to a newly enacted state law limiting city
council members' compensation, the City of Bell hurriedly wrote a
city charter and placed the proposal on the ballot at a special
municipal election on November 29, 2005. It was the only item on
the ballot, with the move being billed as one that would give the
City more local control. The ballot language included no mention
of the effect the change would have on council members' salaries.
Fewer than 400 voters turned out in the City of over 36,000
residents.
The author says the decision to convert a general law city to a
charter city is important, but its importance may not be apparent
to voters.
This bill's requirement that a charter and charter amendment
proposal be placed at a statewide general, statewide primary, or
regularly scheduled municipal election coupled with a ballot
description enumerating new city powers as a result of adopting
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the charter, including the new city council's new power to raise
its own compensation and the compensation of other city officials
without voter approval, would ensure voters have an idea of what
becoming a charter city can mean. However, the ultimate decision
on whether a city is to adopt a charter lies in the hands of the
voters. A ballot pamphlet accompanies every election, and city
measures include an impartial analysis from the city attorney and
any submitted arguments in favor or against the measure. The
Legislature may wish to consider whether it necessary to require
the ballot description to include an enumeration of new city
powers that would result with the adoption of a charter when a
ballot pamphlet already would contain an impartial analysis.
In January 2011, three of the six City of Bell city council
members charged with multiple counts of misappropriating public
funds asked the court to force the City to pay their legal bills
because the three insisted they had not broken any law and were
acting in their official capacities at the time. Former City
Manager Robert Rizzo also filed a complaint in court to have the
City pick up his legal bills while he is defending himself in two
civil cases and a felony complaint that includes more than 50
counts. Rizzo's 1996 employment contract provided for legal
defense fees reimbursement, but City officials are refusing to
abide by those contract terms.
Current law does allow a local agency employer to reimburse an
employee for his or her legal defense fees if the local agency
determines the employee cooperates in his or her defense in good
faith and acted within the scope of his or her employment, among
other things. The author says this bill would rectify this
deficiency by prohibiting a local agency employee who is convicted
of a crime involving the abuse of office from being reimbursed for
his or her legal criminal defense fees. The author may wish to
consider whether it would be better to include these provisions
under Division 3.6 (commencing with Section 810) of Title 1 of the
Government Code rather than creating a new article of law.
The Brown Act requires the meetings of local governments'
legislative bodies to be "open and public," thereby ensuring
people's access to information so they may retain control over the
public agencies that serve them. The Brown Act requires a local
agency to post an agenda for a regular meeting of its legislative
body at least 72 hours before the meeting in a location that is
freely accessible to members of the public. There also are
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modified requirements for posting meeting notices and agendas
depending on whether the meeting is a special meeting, an
emergency meeting, or a dire emergency meeting.
The author says current law does not maximize the opportunities
for the public to be informed of a public meeting, including
hearings on compensation practices. By requiring local agencies
with Internet Web sites to post agendas online with the same
existing disclosure guidelines used for physically posted meeting
notices and agendas, the public would have increased access to a
local agency's decision-making process.
However, this bill does not provide any safe harbor provision for
when a local agency's Internet Web site is not functioning. It is
not unusual for server problems to arise with increased Internet
traffic and usage. There also are situations when the local
government might not be aware its Internet Web site is not
working. Under current law, the requirement of physically posting
an agenda does not encounter these types of issues, making it
foolproof. The Legislature may wish to consider whether it would
be prudent to enact a mandate involving technology that is
frequently fallible.
Also, larger local agencies, such as counties and cities, tend to
have sophisticated Internet Web sites and dedicated information
technology staff. Many smaller special districts and cities,
however, either do not have an Internet Web site or have a very
simple site that contains only their name, mailing address, phone
number, and basic information. Those local government agencies
that have minimal sites might not be able to comply with the
provisions of this bill because they simply do not have the staff
or money to post their agendas. Instead of applying for
reimbursement from the Commission on State Mandates, whose backlog
can be as long as several years, those smaller local government
agencies might instead choose to pull their Internet Web sites
completely. The Legislature may wish to consider whether the risk
of eliminating public access to small cities and special districts
outweighs the benefit of placing meeting notices and agendas
online.
AB 827 De La Torre of (2010) contained identical provisions to
this bill with regard to executive officer employment contracts.
AB 827 passed out of the Local Government Committee on a 6-1 vote
and was vetoed by the Governor with the following message:
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"The scandal with the City of Bell was a disgraceful use of public
funds. I share the public outrage expressed over the abuses
attributed to the City of Bell's management of employee contracts.
Assembly Bill 827 presents good public policy in that it provides
transparency with regards to some municipal personnel contracts,
but it should be applied to all public employees, including labor
union members and state employees. I encourage the Legislature to
enact thoughtful and meaningful solutions rather than a rushed
proposal that is severely limited in its application."
Similar legislation:
AB 392 (Alejo) of 2011 would require a local agency to post at
least 72 hours before a regular meeting of a legislative body the
agenda and applicable staff-generated reports on the local
agency's Internet Web site, if any, and, for a local agency
without an Internet Web site, requires a local agency to disclose
on the physically posted agenda the public location where the
local agency makes available any applicable staff-generated
reports for public inspection and copying at least 72 hours in
advance of the regular meeting.
AB 582 (Pan) of 2011 would require the legislative body of a local
agency to publicly notice twice a proposed compensation increase
of more than five percent for a city manager, deputy city manager,
county chief administrative officer, deputy chief administrative
officer, or similar employee.
Support arguments: The California Common Cause, says requiring a
local agency to post meeting notices online is a failsafe reform
to ensure the growing numbers of people who communicate with
government online are being served.
Opposition arguments: Opposition might argue this bill is an
overreaction to one incident and that, from information gathered
by informal surveys and discussions, the outrageous compensation
provided to the City of Bell's City M anager is a rarity.
Analysis Prepared by : Jennifer Klein Baldwin / L. GOV. / (916)
319-3958
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FN: 0000986