BILL ANALYSIS �
AB 1344
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1344 (Feuer and Alejo)
As Amended August 30, 3011
Majority vote
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|ASSEMBLY: |78-0 |(June 2, 2011) |SENATE: |24-14|(September 7, |
| | | | | |2011) |
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Original Committee Reference: L. GOV.
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 and a maximum cash
settlement that exceeds the amounts provided for in statutory
provisions governing employment contracts; and, provides more
public review when a city is considering placing the adoption of
a charter before the voters.
The Senate amendments :
1)Delete the definition of "compensation" used in the Assembly
version and re-define "compensation" as annual salary,
stipend, or bonus, paid by a local agency employer to a local
agency executive.
2)Delete the term "excluded employee" and replaces it with
"local agency executive":
a) Define "local agency executive" as any person employed
by a local agency who not subject to the
Meyers-Milias-Brown Act or similar provisions, and who
meets either of the following requirements:
i) The person is the chief executive officer of the
local agency; or,
ii) The person is the head of a department of a local
agency.
3)Require, on or after January 1, 2012, any contract executed or
renewed between a local agency and an officer or employee of a
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local agency that provides for paid leave of an officer or
employee pending an investigation to include that any salary
provided for that purpose must be reimbursed if the officer or
employee is convicted of a crime involving and abuse of his or
her position.
4)Provide, that on or after January 1, 2012, any contract of
employment executed or renewed between a local agency and an
officer or employee that provides for legal criminal defense
must require that any funds provided for that that purpose
must be reimbursed if the officer or employee is convicted of
a crime involving and abuse of his or her position.
5)Provide, that on or after January 1, 2012, if a local agency,
absent a contractual obligation, for the payment legal
criminal defense must require that any funds provided for that
that purpose must be reimbursed if the officer or employee is
convicted of a crime involving and abuse of his or her
position.
6)Define "abuse of office or position" as either of the
following:
i) An abuse of public authority, including, but not
limited to, waste, fraud, and violation of the law under
color of authority; or,
ii) A crime against public justice, including but not
limited to, bribery and corruption.
7)Require, prior to submitting the adoption of a charter to the
voters, a city to hold at least two public hearings on the
proposal and contents of the charter, and specify that the
hearings shall be at least 30 -days apart.
8)Prohibit the governing body of a city from conducting a vote
to approve submission to the voters of a proposal to adopt a
charter until 21 days after the second public hearing.
9)Prohibit a legislative body from calling a special meeting
regarding the salaries, salary schedules or compensation paid
in the form of fringe benefits, of a local agency executive.
10)Specify that a legislative body is not prohibited from
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calling a special meeting to discuss the budget of the local
agency.
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 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
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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 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.
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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 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.
AS PASSED BY THE ASSEMBLY , this bill:
1)Prohibited, 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 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)Defined "compensation" to mean any of the following:
a) Annual salary or stipend;
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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)Defined "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)Defined "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)Required 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)Authorized 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
established statewide general, statewide primary, or regularly
scheduled municipal election date provided there are at least
88 days before the election.
7)Required 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.
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8)Required 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)Required 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, decision-making 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)Required the legislative body of a local agency to post at
least 24 hours in advance the notice and agenda for a special
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, decision-making or
advisory, created by charter, ordinance, resolution, or
formal action of a legislative body if the members are
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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)Declared these provisions are a statewide concern and apply
to all counties and cities, including charter counties,
charter cities, and charter cities and counties.
12)Declared these provisions are severable.
FISCAL EFFECT : According to the Senate Appropriations
Committee: 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. 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.
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.
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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 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
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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 adjustment is 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
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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
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.
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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 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 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.
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.
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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:
"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."
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 practices observed by
City of Bell are not very common.
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958
FN: 0002468