BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1344 (Feuer)
Hearing Date: 08/15/2011 Amended: 07/11/2011
Consultant: Mark McKenzie Policy Vote: G&F 9-0
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BILL SUMMARY: AB 1344 would restrict certain compensation
practices for local agency executive officials, require
reimbursement from local agency employees convicted of crimes
involving abuse of office, and make changes to procedures for
adopting city charters. Specifically, this bill would:
Prohibit any future contract between a local agency and
executive staff from providing for automatic renewal of the
contract that that includes automatic compensation increases
that exceed a cost-of-living adjustment, or a maximum cash
settlement that exceeds 18 months of salary plus benefits.
Require any contract between a local agency and an officer or
employee to provide for reimbursement of the following if that
person is convicted of a crime involving abuse of office or
position: any salary provided as paid leave pending an
investigation; funds provided for legal or criminal defense;
and cash settlements related to termination of employment.
Require reimbursement of these payments if an employee not
subject to an employment contract is convicted of a crime
involving abuse of position.
Delete the authority for a city charter, charter amendment, or
charter repeal to be presented to the voters at a special
election called for that purpose.
Require a proposal to adopt or amend a charter to include
explicit notice of new city powers, including powers to raise
city council or officials' compensation without voter
approval.
Clarify that a charter or charter amendment proposed by a
charter commission must be presented to the voters at least 95
days prior to an election.
Require specified local agencies that have an internet website
to post meeting agendas on that website, as specified.
Prohibit local agency legislative bodies from calling a
special meeting regarding the salaries, salary schedules, or
benefit compensation of local agency executives.
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Fiscal Impact (in thousands)
AB 1344 (Feuer)
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Major Provisions 2011-12 2012-13 2013-14 Fund
Contracts mandate unknown state-reimbursable
mandatedGeneral
costs (see staff comments)
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Existing law general 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 local elected governing boards. All employment contracts
between a local agency and an employee are required to include a
provision that limits the maximum cash settlement an employee
may receive upon termination of the contract to the monthly
salary of the employee multiplied by the number of months left
on the unexpired term of the contract, not to exceed 18 months.
Last September, eight current and former Bell city officials,
including four of the five sitting city council members at the
time, were arrested and charged with multiple counts of
misappropriating public funds and defrauding taxpayers of
roughly $5.5 million. News reports at that time exposed conduct
by the city council that, though sometimes in compliance with
state law, inappropriately compensated councilmembers and city
officials. The City of Bell used the authority granted under
current law to pass a charter at a special election that granted
them the ability to govern their own municipal affairs,
including the ability to set their own compensation. This bill
is intended to address deficiencies in existing law that were
exploited by Bell officials and to ensure greater transparency
related to local official compensation practices.
AB 1344 would impose a reimbursable state-mandated local program
by placing new requirements on employment contracts that are
executed or renewed by local agencies as of January 1, 2012.
Specifically, the bill would prohibit contracts with executive
level employees from containing provisions authorizing specified
AB 1344 (Feuer)
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automatic compensation increases or cash settlements exceeding
certain statutory requirements. The bill would also require
future employment contracts with all employees to provide for
reimbursement of specified payments if an employee is convicted
of a crime involving abuse of office or position. The bill's
requirements would apply to all local public agencies, including
general law cities, charter cities, counties, school districts,
and special districts, and would require changes to employment
contracts and procedures involving legal staff time. Total
reimbursable mandate costs are unknown, and would depend upon
whether affected agencies submit a successful claim for
reimbursement. These costs would likely be relatively minor for
most agencies, and many would forego reimbursement. If five
percent of the over 6000 affected agencies incur costs of over
$1,000 and file a successful claim, however, total statewide
costs would exceed $300,000. Most of these costs would be
one-time, with minor ongoing costs.
There are no state fiscal impacts related to provisions that
revise procedures for adopting or amending city charters or
those that require meeting agendas to be posted on local agency
websites. Costs for the latter requirement are not
state-reimbursable because there are no statutory requirements
that a local agency maintain a website.
Staff notes that AB 827 (De La Torre), which was vetoed by the
Governor, contained provisions that are similar to the
restrictions on employment contracts provided in AB 1344. The
veto message stated the following:
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.
AB 1344 (Feuer)
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