BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 673|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SB 673
Author: DeSaulnier (D)
Amended: 1/23/14
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM : 5-0, 1/13/14
AYES: Beall, Walters, Block, Gaines, Yee
SUBJECT : County employees retirement: Contra Costa County
SOURCE : Contra Costa County Board of Supervisors
Contra Costa County Employees Retirement
Association
DIGEST : This bill makes the Contra Costa County retirement
system (System) an independent, public employer district within
the Country Costa County Employees Retirement Association
(CCCERA) and the statutory employer for System employees. This
bill also provides that System employees are eligible for CCCERA
membership.
Senate Floor Amendments of 1/23/14 correct a minor typographical
error.
ANALYSIS :
Existing law:
CONTINUED
SB 673
Page
2
1. Establishes the County Employees Retirement Law of 1937
(CERL or '37 Act), which governs 20 independent county
retirement associations, including CCCERA.
2. 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.
3. Provides both Orange and San Bernardino county retirement
systems authority to be independent districts within their
respective retirement associations and the statutory employer
for purposes of determining their employees' compensation and
benefits.
4. 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.
5. 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 (the Board) to
establish conditions of employment for county employees
working at the System.
6. Provides, under the Myers-Milias-Brown Act (MMBA), for the
administration and resolution of labor relations between
employees of local public agencies and their respective
public employers.
This bill:
1. Establishes that the System is an independent public agency
"district" under CERL rather than a division of Contra Costa
County and clarifies that 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 a
memorandum of understanding (MOU) with recognized employee
representatives.
CONTINUED
SB 673
Page
3
2. Clarifies that System employees and other county employees
who have prior service with Contra Costa 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.
3. Provides that new System employees without prior eligible
CCCERA service become CCCERA members on the first day of the
calendar month following their entrance into service (i.e.,
hire date).
4. 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.
5. Requires the System to retain existing non-probationary
employees who were covered by an MOU with Contra Costa 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.
6. Provides that the terms and conditions for retained
employees shall be subject to the terms and conditions
established by the applicable MOUs between Contra Costa
County and the employees' recognized employee organization
prior to the System's establishment as a district.
7. 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
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
CONTINUED
SB 673
Page
4
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.
This bill effectuates 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 1/14/14)
Board of Supervisors, Contra Costa County (co-source)
Contra Costa County Employees Retirement Association (co-source)
AFSCME, Local 2700
International Federation of Professional and Technical
Engineers, Local 21
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.
CONTINUED
SB 673
Page
5
The Contra Costa County Board of Supervisors 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."
JL:nl 1/23/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED