BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 673
Jim Beall, Chair HEARING DATE: January 13, 2014
SB 673 (DeSaulnier) as amended 1/06/14 FISCAL: NO
1937 ACT COUNTY RETIREMENT SYSTEM: CONTRA COSTA COUNTY
HISTORY :
Sponsor: Contra Costa County Board of Supervisors
Other legislation: AB 1992 (Correa)
Chapter 74, Statutes of 2002
SB 777 (Soto)
Chapter 369, Statutes of 2006
SUMMARY :
SB 673 makes the Contra Costa County retirement system (the
System) an independent, public employer district within the
Country Costa County Employees Retirement Association
(CCCERA) and the statutory employer for System employees.
The bill also provides that System employees are eligible for
CCCERA membership.
BACKGROUND AND ANALYSIS :
1)Existing law :
a) establishes the County Employees Retirement Law of
1937 (CERL or '37 Act), which governs twenty independent
county retirement associations, including the Contra
Costa County Employees Retirement Association (CCCERA).
b) defines specified districts formed under the law of
the state, located wholly or partially within a county
and states that these districts are public employers
whose employees are eligible to participate in their
respective '37 Act county retirement associations.
c) provides both Orange and San Bernardino county
retirement systems authority to be independent districts
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within their respective retirement associations and the
statutory employer for purposes of determining their
employees' compensation and benefits.
d) provides that CCCERA retirement system employees are
county employees subject to the county civil service or
merit system rules adopted by the board of supervisors
for the compensation of county officers and employees.
e) pursuant to constitutional provisions and applicable
case law, provides that retirement boards have plenary
authority to administer their respective retirement
systems and authorizes the CCCERA Board of Retirement to
establish conditions of employment for county employees
working at the System.
f) under the Myers-Milias-Brown Act (MMBA), provides for
the administration and resolution of labor relations
between employees of local public agencies and their
respective public employers.
2)This bill :
a) establishes that the CCCERA retirement system (the
System) is an independent public agency "district" under
CERL rather than a division of Contra Costa County and
clarifies that the CCCERA Board of Retirement (the
Board) may appoint necessary personnel as specified.
System employees will no longer be Contra Costa county
employees but rather employees of the retirement system
subject to terms and conditions of employment
established by the Board and set forth in an MOU with
recognized employee representatives.
b) clarifies that System employees and other county
employees who have prior service with the county and who
are appointed to the System after it becomes an
independent district retain their membership in CCCERA
without interruption in service or loss of credit.
c) provides that new System employees without prior
eligible CCCERA service become CCCERA members on the
first day of the calendar month following their entrance
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into service (i.e., hire date).
d) provides that county civil service rules do not apply
to System employees but that collective bargaining rules
under MMBA do apply. As determined by the Board, the
CCCERA retirement fund shall bear expenses related to
System employees' compensation as specified.
e) requires the System to retain existing
non-probationary employees who were covered by an MOU
with the county and worked at the retirement system for
a 90-day transition period unless just cause or
legitimate grounds exist to terminate or layoff the
employees. If the System determines layoffs are
necessary during the 90-day transition period, the
System shall retain employees based on seniority within
job classifications.
f) provides that the terms and conditions for retained
employees shall be subject to the terms and conditions
established by the applicable MOUs between the county
and the employees' recognized employee organization
prior to the System's establishment as a district.
g) requires the System to recognize the employee
organizations that represented the retained employees in
negotiations with the county and provides that initial
terms and conditions for those employees shall be those
previously established by the applicable MOU with the
county.
COMMENTS :
1) Background - Most '37 Act county retirement systems are
county agencies and their employees are county employees.
However, independent retirement boards have constitutional
rights and duties to oversee the systems' administration.
Some counties and retirement boards, by mutual agreement,
have made their retirement systems independent districts
within their applicable retirement association. Currently,
the Orange County and San Bernardino County retirement
systems both have statutory authority to be independent
districts within their respective retirement associations.
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This bill would effectuate a settlement agreement to
resolve a lawsuit over the role and conflicting
responsibilities among the Contra Costa County
Auditor-Controller, the Contra Costa Board of Supervisors,
and the CCCERA Board of Retirement. Under existing law,
the CCCERA Board has authority to establish compensation
for retirement system employees, the Board of Supervisors
has responsibility to establish civil service rules and
enter MOUs for all county employees, and the
Auditor-Controller provides payroll and oversight services.
The Auditor-Controller would not issue pay warrants to
CCCERA employees that did not reflect reductions from
furloughs for county employees as required by the Board of
Supervisors despite receiving direction from the CCCERA
Board to do so since the CCCERA Board had not authorized
reductions for retirement system employees. Additionally,
the Auditor-Controller indicated that issuing full pay
warrants to the CCCERA employees would cause Contra Costa
County to violate MOUs that prohibited disparate treatment
among employees in the same class.
2) Arguments in Support :
According to the author, "administrative issues continued
to arise concerning terms and conditions of employment for
the staff serving at CCCERA" resulting in a lawsuit filed
by CCCERA against the County and the Auditor-Controller.
The sponsor states that "this case was resolved in 2013
through a court-approved settlement providing that the
(retirement system) staff would be employed by the CCCERA
directly instead of employed by the county and that the
parties would jointly seek the legislation necessary to
implement this transition."
AFSCME Local 2700 states that "we believe the language and
intent of the bill will serve the very best interests of
our members and CCCERA, and will promote positive relations
among ourselves, the County and CCCERA."
3)SUPPORT :
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Board of Supervisors, Contra Costa County, Sponsor
Contra Costa County Employees Retirement Association
(CCCERA), Co-Sponsor AFSCME Local 2700
4)OPPOSITION :
None on file.
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