BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 151 (Correa)
Hearing Date: 4/25/2011 Amended: 4/14/2011
Consultant: Maureen Ortiz Policy Vote: PE&R: 3-2
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BILL SUMMARY: SB 151, an urgency measure, ratifies the
Memoranda of Understanding (MOU) between the State and the
following bargaining units:
-- Bargaining Unit 2 (California Attorneys, ALJs & Hearing
Officers - CASE);
-- Bargaining Unit 6 (California Correctional Peace Officers
Association);
-- Bargaining Unit 7 (California Statewide Law Enforcement
Association);
-- Bargaining Unit 9 (Professional Engineers in California
Government);
-- Bargaining Unit 10 (California Association of Professional
Scientists); and
-- Bargaining Unit 13 (International Union of Operating
Engineers).
SB 151 approves addenda to Memoranda of Understanding entered
into by the state and Bargaining Units 12, 16, 18 and 19 which
provides members with two Professional Development Days; and
approves addenda to Units 1, 3, 4, 11, 14, 15, 17, 20 and 21
which will exempt employees in these bargaining units who work
at the State Compensation Insurance Fund from the Personal Leave
Program. Consequently, there will be a loss of savings that has
already been budgeted of approximately $11.23 million in FY
2010-11, and $5.6 million in FY 2011-12.
Additionally, the bill provides a continuous appropriation for
the payment of employee compensation for the affected units in
the event that the state budget is not enacted by July 1 of each
year covered by the MOU.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Summary of MOU costs: ($67,400) ($215,900)
$18,495 Gen/Spec
Salary increases 7-1-13: -----approximately $151.2 million
annually----- Gen/Spec
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense file.
These fiscal estimates do not include the savings of
approximately $449 million ($275 General Fund) that resulted
from the existing three day furlough program since those savings
have already been included in the 2010-11 Budget Act.
Additionally, since the agreements eliminate the three day
furlough as of April 1, 2011 and replace it with a one day per
month Personal Leave Program, there is a of loss of savings of
about $271 million ($103 GF) to the current year budget.
FISCAL IMPACT BY INDIVIDUAL BARGAINING UNIT
UNIT 2
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Unit 2: 3,300 full time equivalents -- effective April 2,
2011 through July 1, 2013.
Personal leave program:($1,193) ($3,578) $0
General
($3,288)
($9,863) $0
Specials
Employee pension contrib: ($531) ($2,146)
($2,146) General
($1,724)
($6,969) ($6,969) Specials
Health benefits $198 $1,118
$1,709General
$642
$3,632 $5,550 Specials
Leave credit: $258 $1,032 $0 General
$839 $3,354 $0 Specials
Salary adjustment: ----annual costs of $17.5 million
beginning 7-1-2013 Gen/Spec
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The Bargaining Unit 2 contract will result in current year
savings of approximately $4.8 million. The total savings from
the Unit 2 MOU FY 2011-12 are estimated at $13 million.
UNIT 6
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Unit 6 : 28,124 full time equivalents - effective ratification
through July 2, 2013.
Personal Leave Program ($30,984) ($92,952)
$0General
($91)
($93) $0
Special
Employee pension contrib: ($13,194)
($53,416) ($55,333) General
($13)
($53) ($55)
Special
Health contributions: $11,728 $76,729
$119,410 General
$12
$83 $118
Special
Elimination of POFF II contrib: ($10,492)
($41,968) ($41,968) General
($10)
($42) ($42) Special
Recruitment/Shift Differential ($2) ($10)
($10) General
($203) ($203)
Special
Salary Adjustment --annual costs of $88.1 million
beginning 7-1-2013-- Gen/Spec
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Total current year savings associated with the Unit 6 contract
are approximately $43 million, and savings for FY 2011-12 are
about $112 million.
UNIT 7
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Unit 7 : 6,185 full time equivalents - effective ratification
through July 1, 2013.
Personal Leave Program ($1,329) ($3,986) $0
General
($3,630)
($10,891) $0 Special
Employee pension contrib: ($542) ($2,193)
($2,193) General
($1,480)
($5,992) ($5,992)
Special
Health contributions: $558
$2,977 $4,323 General
$1,524
$8,134 $11,813
Special
Union Release Time ($74) ($74)
($74) General
($203)
($203) ($203)
Special
Salary Adjustment ---annual costs of $8.7 million
beginning 7-1-2013 Gen/Spec
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Total current year savings associated with the Unit 7 contract
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are approximately $5.1 million, and savings in FY 2011-12 are
about $12.2 million.
UNIT 9
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Unit 9: 10,112 full time equivalents - effective April 1, 2011
through July 1, 2013.
Personal Leave Program ($335) ($1,005)
$0 General
($13,977)
($41,932) $0 Special
Employee pension contrib: ($156) ($634)
($656) General
($6,543)
($26,490) ($27,440)
Special
Health contributions: $274
$500 $736 General
$9,002
$18,476 $18,476
Special
Salary Adjustment ----annual costs of $29 million beg
7-1-2013 Gen/Spec
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Total current year savings for the Unit 9 agreement are
approximately $11.7 million and full first year savings in FY
2011-12 will be about $51 million.
UNIT 10
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Unit 10: 2,440 full time equivalents - effective April 1, 2011
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through July 1, 2013.
Personal Leave Program ($351) ($1,054)
$0 General
($2,091)
($6,273) $0
Special
Employee pension contrib: ($149) ($602)
($623) General
($893)
($3,614) ($3,742)
Special
Health contributions: $306
$567 $837 General
$1,461
$3,026 $3,142
Special
Salary Adjustment ----annual costs of $5 million beginning
7-1-2013 Gen/Spec
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Total current year savings for the Unit 10 agreement are $1.7
million, and first year savings in FY 2011-12 are approximately
$8 million.
UNIT 13
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Unit 13: 912 full time equivalents - effective April 1, 2011
through July 1, 2013.
Personal Leave Program ($559) ($1,678)
$0 General
($267)
($803) $0
Special
Employee pension contrib: ($427) ($1,728)
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($1,789) General
($213)
($864) ($894)
Special
Health contributions: $202
$1,098 $1,619 General
$101
$550 $810
Special
Holiday pay $42
$252 $252 General
$5
$32 $32 Special
Salary Adjustment ----annual costs of $3.6 million beginning
7-1-2013 Gen/Spec
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Total current year savings for the Unit 13 agreement are $1.1
million, and first year savings in FY 2011-12 are approximately
$3.1 million.
In addition to the fiscal impact noted above, there will be
millions of dollars in savings to the state in future years as
new state employees are hired on or after January 15, 2011, and
will be subject to a significantly lesser retirement benefit
formula. Those savings, however, have not been actuarially
identified at this time, and will not be realized to the state
until those affected new employees retire from state service.
The increase in the employee's retirement contribution will
result in an immediate corresponding reduction in the state
rate.
Specific provisions in these agreements include the following:
RETIREMENT
Benefit Formula Calculation
Bargaining Unit 2, Unit 6, Unit 7, Unit 9, Unit 10, Unit 13 :
Miscellaneous and Industrial members who are first hired on or
after January 15, 2011 will be subject to a retirement formula
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of 2% at age 60 (from current 2% at age 55).
Bargaining Unit 2, Unit 7, Unit 9, Unit 10, Unit 13 : State
Safety members who are first hired on or after January 15, 2011
will be subject to a retirement formula of 2% at age 55 (from
the current 2.5% at age 55).
Bargaining Unit 6, Unit 7 : Peace Officer/Firefighter Employees
(PO/FF) members who are first hired after January 15, 2011 will
be subject to the 2.5% at 55 formula.
Bargaining Unit 6, Unit 7, Unit 9 : Newly hired members
employed after January 15, 2011 will have retirement benefits
calculated on the employees' highest consecutive 36 month
salary.
Employee Pension Contribution: Effective First Pay Period After
Ratification
Unit 2 : Current Miscellaneous and Industrial members shall have
their contribution increased from 6% to 9% of monthly
compensation over $513. State Safety members' contribution will
increase from 7% to 10% of monthly compensation over $317.
Unit 6 : Miscellaneous and Industrial members' pension
contribution will increase from 5% to 8% of compensation over
$513. PO/FF members will have their pension contribution
increased from 8% to 11% of monthly compensation over $863.
Effective April 1, 2011, the State Peace Officers' and
Firefighters' Defined Contribution Plan (POFF II) will be
terminated. POFF II, established in 1998, requires the State to
contribute 2% of Peace Officer/Fire Fighter employees' base pay
into a DC plan.
Unit 7 : POFF members shall have their pension contribution
increased from 8% to 10% of compensation over $513; State safety
members' pension contribution will increase from 6% to 9% of
compensation over $317. Miscellaneous and Industrial members'
contribution will increase from 5% to 8% of monthly compensation
over $513.
Unit 9, Unit 10 : Miscellaneous and Industrial members'
retirement contribution will increase from 5% to 8% of monthly
compensation over $513. State safety members' contribution will
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increase from 6% to 9% of monthly pay over $317.
Unit 13 : Miscellaneous and Industrial members will have their
retirement contribution increased from 5% to 10% of monthly
compensation over $513. State safety members' contribution will
increase from 6% to 11% of compensation over $317.
COMPENSATION
Adjusted Pay Ranges-Effective July 1, 2013
Unit 2 and Unit 6 PO/FF : All represented classifications shall
be adjusted by increasing the maximum step of the pay range by
4%. This increase will apply only to employees who reach the
top step of the pay range.
Unit 6 : Miscellaneous and Industrial members will have the top
salary step increased by 3%.
Unit 7 : The maximum step of the pay range for PO/FF members
will be increased by 2%; the maximum step will increase by 3%
for State Safety members and those employee subject to the
Miscellaneous and Industrial retirement category.
Unit 9, Unit 10 : The maximum step of all classifications will
increase by 3%.
Unit 13 : The maximum step of all represented classification
will increase by 5%.
Personal Leave Program
Effective the pay period following legislative ratification, the
Personal Leave Program (PLP) will apply to all members of
Bargaining Unit 2, Unit 6, Unit 7, Unit 9, Unit 10, and Unit 13.
This program reduces pay by approximately 5% in return for one
day off per month during a 12 month period. This leave time
cannot be cashed-out. Members of Unit 10 may choose to
accelerate the PLP days to 2 or 3 per month.
The State agrees not to implement a new furlough program for
Unit 2, Unit 6, Unit 7, Unit 9, Unit 10, or Unit 13 employees
during the twelve full months that the PLP is in effect.
Additional 1.73 Hours Leave Per Month
Each Bargaining Unit 2 employee will receive 1.73 hours per
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month in leave credit (equivalent to 1% of gross salary per
year) through June 30, 2013. This leave has cash value similar
to vacation leave.
HEALTH BENEFITS
Unit 2, Unit 7 : The state's contribution for health insurance
shall set at a dollar amount that equals eighty percent of the
weighted average of the premiums for the four basic health
benefit plans with the largest enrollment (known as the 80/80
formula). The current amounts of the 80/80 formula are: $482
for employee only, $946 for employee plus one dependent, and
$1,241 for employee plus two or more dependents. The amounts
shall be increased according to the 80/80 formula on January 1,
2012 and January 1, 2013.
Unit 6 : The state will contribute one-half the difference
between the 2006 85/80 formula rate and the 2011 80/80 formula
rate as follows: $377 for employee only, $746 for employee plus
one dependent, and $968 for employee plus two or more. The
amounts will be increased equivalent to the 80/80 formula on
January 1, 2012 and January 1, 2013. The state will also
contribute for dental and vision benefits.
Unit 9 : The state will contribute an amount based on the 85/80
formula: $460 for employee only, $893 for employee plus one
dependent, and $1,156 for employee plus two or more. The state
will also contribute for dental and vision benefits.
Unit 10, Unit 13 : The state will contribute an amount based on
the 80/80 formula: $433 for employee only, $866 for employee
with one dependent, and $1129 for employee plus two or more
dependents. The state will also contribute for dental and vision
benefits.
PERSONAL DEVELOPMENT DAYS
- Unit 2 employees shall receive two days per fiscal year for
professional/personal development activities. The days cannot
be accumulated and do not have a cash value. The activities
shall be at the employees' expense and must be used within the
fiscal year they are granted. These days are in addition to the
three professional development days continued from the prior
Unit 2 contract.
- Unit 6, Unit 7, Unit 9, Unit 10, and Unit 13 employees will
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receive two days of personal development leave per fiscal year
for activities that promote professional and/or personal growth.
The days have no cash value.
MISCELLANEOUS
- The State and Unit 2, Unit 6, Unit 7, Unit 9, Unit 10, and
Unit 13 agree to delete Lincoln's Birthday and Columbus Day as
recognized holidays. Additionally, no leave will be counted
toward hours worked for purposes of calculating overtime pay.
- Unit 2, Unit 10, and Unit 13 employees at the State
Compensation Insurance Fund are exempted from the Personal Leave
Program for the term of the agreement.
- Unit 2, Unit 6, Unit 7, Unit 10, and Unit 13 shall be
provided contract protection in the event that another
bargaining unit enters into an agreement that does not contain
pension reform and provides a greater value, each unit may
reopen related economic provisions of its MOU and meet and
confer to discuss similar or equivalent increases.
- Unit 6: Employees will donate one hour of annual leave per
year to fund a Union Release Time Bank.
- Unit 6: Use of leave credits will not be considered as time
worked for purposes of calculating overtime. Employees who work
on a holiday will no longer earn holiday credit, but will
receive two-times their hourly rate for working on a holiday.
The cap is eliminated on the 80 day limit for vacation leave
accrual.
- Unit 6: Employees who work at Pelican Bay State Prison, High
Desert State Prison, and the California Correctional Center will
receive $200 per month to address recruitment and retention
problems at those facilities. The stipend will end when a $6
million cap is expended.
- Unit 7: The state removed the Paid Release program which
allowed two union officials time off of work, and instead,
members will contribute one and one-half hours per year toward a
union Release Time Bank.
- Unit 7 and employees in Work Week Group 2 of Unit 9, Unit
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10, and Unit 13 who work on January 1, Memorial Day, July 4th,
Labor Day, Thanksgiving Day, or Christmas will receive one and
one-half the regular pay rate, and Unit 7 members will receive
up to eight hours of holiday credit for all hours worked on the
holiday.
- Unit 7 employees in state-owned housing will pay increased
rent at the FMV, and utilities will be reimbursed to the state.
-- Unit 9, Unit 10: A salary survey will be conducted for
informational purposes only; and a Joint Labor/Management
Committee will be established to discuss and provide
recommendations on HR Modernization projects. Unit 13 will have
a salary survey conducted and the results may be used for
negotiations of future MOUs.
The Ralph C. Dills Act requires that the economic provisions of
collective bargaining agreements that are negotiated between the
state and bargaining units must be ratified by the Legislature.
Staff notes that the agreements ratified by SB 151 were reached
beginning on March 8, 2011 and were presented to the Legislature
as each one became available.
Pursuant to Chapter 499, Statutes of 2005 (SB 621, Speier) the
Legislative Analyst's Office is required to prepare and
distribute an analysis of every MOU within 10 days after it is
presented to the Legislature. Additionally, Senate Rule 29.4
requires the final version of an MOU to be available to the
Legislature for seven legislative days before the Senate may act
on the MOU. Both of these legislative requirements have been
met.