BILL ANALYSIS �
SB 673
Page 1
Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Rob Bonta, Chair
SB 673 (DeSaulnier) - As Amended: January 23, 2014
SENATE VOTE : 34-0
SUBJECT : County employees' retirement: Contra Costa County.
SUMMARY : Makes the Contra Costa County retirement system
(System) an independent, public employer district within the
Contra Costa County Employees Retirement Association (CCCERA)
and the statutory employer for System employees. Specifically,
this bill :
1)Establishes that the System is an independent public agency
"district" under County Employees Retirement Law of 1937 (CERL
or '37 Act) 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 CCCERA Board of Retirement (the Board) and set forth in a
memorandum of understanding (MOU) with recognized employee
representatives.
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
Myers-Milias-Brown Act (MMBA) do apply. As determined by the
Board, the CCCERA retirement fund will bear expenses related
to System employees' compensation as specified.
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5)Requires the System to retain existing non-probationary
employees who were covered by a 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 will retain employees based on seniority within job
classifications.
6)Provides that retained employees are 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 are those previously established by the
applicable MOU with the county.
EXISTING LAW :
1)Establishes CERL, 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,
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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 MMBA, for the administration and
resolution of labor relations between employees of local
public agencies and their respective public employers.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal by
Legislative Counsel.
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 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.
According to the author, "administrative issues continued to
arise concerning terms and conditions of employment for the
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staff serving at CCCERA" resulting in a lawsuit filed by CCCERA
against the County and the Auditor-Controller.
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 states that "This bill will resolve a legal dispute
between CCCERA and the County. CCCERA, the County's Board of
Supervisors, and AFSCME Local 2700, which represents public
employees in Contra Costa County, all support the bill because
it will resolve the outstanding legal issues and serves the best
interest of the workers."
REGISTERED SUPPORT / OPPOSITION :
Support
Contra Costa County Board of Supervisors (Co-Sponsor)
Contra Costa County Employees Retirement Association
(Co-Sponsor)
American Federation of State, County and Municipal Employees
California State Firefighters' Association
International Federation of Professional and Technical Engineers
Local 21
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957