CC SR 20170502 D - AB 1250 Contracts for Personal ServicesRANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
AGENDA DESCRIPTION:
MEETING DATE: 05/02/2017
AGENDA HEADING: Consent Calendar
Consideration and possible action to receive and file an update on Assembly Bill
No. 1250 regarding contracts for personal services
RECOMMENDED COUNCIL ACTION:
(1) Received and file an update on Assembly Bill No. 1250 (AB 1250) regarding
contracts for personal services.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Kit Fox, AICP, Senior Administrative Analyst,
REVIEWED BY: Gabriella Yap, Deputy City Manager; -
APPROVED BY: Doug Willmore, City Managerly{
ATTACHED SUPPORTING DOCUMENTS:
A. Letter in opposition to AB 1250 (page A-1)
B. League of California Cities "Action Alert" and fact sheet for AB 1250 (page
B-1)
C. AB 1250 (page C-1)
BACKGROUND AND DISCUSSION:
On April 12, 2017, the League of California Cities (League) advised Staff that Assembly
Bill No. 1250 (AB 1250) had been introduced on February 17, 2017, by
Assemblymember Reggie Jones -Sawyer from Los Angeles. On April 14, 2017, the City
Attorney's Office alerted Staff that AB 1250 was scheduled for hearing in the
Assembly's Public Employees, Retirement and Social Security Committee on April 19,
2017. As currently proposed, AB 1250 would place substantial burdens on local
agencies by adding onerous, over -prescriptive and unnecessary requirements that
impede on local control and have significant impacts on local governance. The new
reporting requirements, privacy concerns, increased costs, and potential for litigation
created by this measure would place an overwhelming and significant burden on nearly
every city department and would create a de facto ban on virtually all contracting
services (Attachment C). The League opposes AB 1250 (Attachment B) and has asked
cities to express their opposition to the bill as well.
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In 2014, the State Assembly adopted House Resolution No. 29 (HR 29), which the
League strongly opposed. HR 29 was a non-binding resolution that aimed to restrict
local governments' ability to contract out for services. With HR 29 serving as its
"blueprint," AB 1250 would:
• Require a city, before entering a contract or renewing a contract, to perform a full
economic analysis of the potential impacts of outsourcing, including the impact
on local businesses if consumer spending power is reduced.
• Mandate a city to conduct a full environmental impact analysis caused by
contracting for the services.
• Force a city to conduct an annual audit of each contract.
• Eliminate local agency hiring discretion by limiting a local agencies' ability to
utilize a contract for the sole purpose of cost savings through salaries and
benefits.
• Require that the agency provide an orientation to contract non -city employees.
• Require a city to create a new, fully -searchable database that must be posted on
the city website. Apart from the inherent cost drivers with this provision, there
are significant privacy concerns about posting full names, job titles, and salaries
of non -city employees. This database must include:
o The names, job titles, salary of each contracted non -city employee and
subcontractors.
o The services of the contract, the name of the agency department or
division of the city who manages the contract.
o The amount paid to the contract including the total projected cost of the
contract for all fiscal years and the funding source.
o The total number of "full-time equivalent" employees being contracted out.
Since the urgency to take a position on AB 1250 was brought to the City's attention after
the agenda had already been posted for the April 19, 2017, City Council meeting, and
since even amending the agenda and adding this item still would not have allowed
sufficient time to make the City's position known before the hearing, Staff prepared a
letter in opposition to the bill for the City Manager's signature on April 17, 2017
(Attachment A). As of the date that this report was completed, AB 1250 had failed
passage in its first Committee hearing, but will be reconsidered by the Committee at
some point. Staff will continue to monitor and provide periodic updates to the City
Council regarding AB 1250.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action is available for
the City Council's consideration:
Provide additional direction to Staff regarding the City's position on
AB 1250.
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April 17, 2017 C ITV OF RANCHO PALOS VERDES
CITY MANAGER'S OFFICE
ADMINISTRATION
The Honorable Reginald Jones -Sawyer, Sr.
California State Assembly, 59th District Via FAX: (916) 319-2159
State Capitol Building, Room 2117
Sacramento, CA 95814
SUBJECT: AB 1250 (Jones -Sawyer). Counties and Cities: Contracts for Personal
Services.
Notice of Opposition (as amended 04/07/17)
Dear Assembly Member Jones -Sawyer:
The City of Rancho Palos Verdes must respectfully oppose your Assembly Bill (AB) 1250, which
effectively eliminates almost all contracting services for cities and counties.
Local governments have a long history of addressing service delivery challenges with creativity,
self-reliance and innovation. Unique local challenges and limited budgets continue to fuel
innovative efforts to obtain expertise and provide high quality services. City employees provide
many services, while others such as refuse collection and specialized services are provided on a
contract basis. Law enforcement services may also be provided via contract with the sheriff, and
fire and park services by a special district.
As amended, AB 1250 places substantial burdens on local agencies by adding onerous, over -
prescriptive and unnecessary requirements that impede on local control and have significant
impacts on local governance. Specifically AB 1250:
Creates Significant Cost and Workload Requirements:
AB 1250 eliminates local agency hiring discretion by limiting a local agencies' ability to utilize a
contract for the sole purpose of cost savings through salaries and benefits. This creates a
significant hurdle as many local agencies continue to struggle financially and have not achieved
the same level of economic prosperity compared to pre -2008 recession levels. Unemployment
rates remain high in certain areas, agencies are at a near breaking point on their unfunded
actuarial liability (UAL) and normal pension costs and some communities remain in significant
financial difficulty.
Moreover, AB 1250 requires that the agency provide an orientation to contracted employees. Last
year, AB 2835 (Cooper) which mandated that public employers must provide an orientation to
their own employees was tagged at $350 million in ongoing costs by the California department of
Finance. Having a local agency provide an additional orientation to non -city employees create
significant cost and logistical concerns.
Additionally, there are real and significant privacy concerns about posting full names, job titles
and salaries of non -city employees. AB 1250 would require a city to create a new, fully searchable
database that must be posted on the city website which will include substantive and sensitive
information including the names, job titles, salary of each contracted employee (and
30940 HAWTHORNE BLVD. / RANCHO PALOS VERDES, CA 90275-5391 / (310) 544-5207 / FAX (310) 544-5291 / www.RPVCA.GOV
PRINTED ON RECYCLED PAPER A-1
The Honorable Reginald Jones -Sawyer, Sr.
April 17, 2017
Page 2
subcontractors) and services of the contract, the name of the agency department or division of
the city who manages the contract.
Creates a series of new and burdensome reporting requirements prior to entering or
renewing a contract:
AB 1250 would require a city, before entering a contract or renewing a contract, to perform a full
economic analysis of the potential impacts of outsourcing, including the impact on local
businesses if consumer spending power is reduced (among other factors). AB 1250 mandates a
city to conduct a full environmental impact analysis caused by contracting for the services.
Further, the measure forces a city to conduct an annual audit of each contract and prohibits a city
from renewing or granting a new contract before the report is released and considered by the
council.
Increased Litigation to Local Agencies:
AB 1250 applies joint and several liability for employment law violations arising from performance
of the contractor as well as torts committed by the contractor or any of its subcontractors in the
course of providing services under the contract would place overly restrictive requirements on
cities and potentially open that agency up to litigation.
Cities continue to face difficult budget conditions, which have been compounded by recent state
takeaways including the loss of redevelopment and expanding pension and retiree health care
obligations. This measure compounds existing constitutional limitations on local agencies to raise
additional revenue. Thus, local agencies are in no position to have their flexibility further curtailed.
The workload, privacy concerns, costs and litigation created by this measure places an
overwhelming and significant burden on nearly every city department and would create a de facto
ban on virtually all contracting services. For these reasons, the City of Rancho Palos Verdes
opposes Assembly Bill 1250.
Sincerely, ,
MAJAO---�
Doug Willmore
City Manager
cc: Mayor Brian Campbell and Rancho Palos Verdes City Council
Senator Ben Allen, 26th State Senate District (via FAX (916) 651-4926)
Assembly Member Al Muratsuchi, 66th State Assembly District (via FAX (916) 319-2166)
Jeff Kiernan, League Regional Public Affairs Manager)
Michael Bolden, Chief Consultant, Assembly Committee Public Employees, Retirement,
& Social Security
Joshua White, Consultant, Assembly Republican Caucus
Camille Wagner, Legislative Secretary, Office of Governor Edmund G. Brown, Jr.
Meg Desmond, League of California Cities
A-2
From: Jeff Kiernan
To: Jeff Kiernan
Subject: ACTION ALERT: AB 1250 (Jones -Sawyer) De Facto Ban on Local Government Contracts
Date: Wednesday, April 12, 2017 3:46:03 PM
Attachments: AB 1250 (Jones -Sawyer) SAMPLE 0000se 4.12.17.docx
AB 1250 Fact Sheet 041017.odf
ab 1250 98 A bill.odf
Good Afternoon City Managers,
Below is an action alert for AB 1250 which should be a concern for any city which contracts for
services. Please note this bill is up for hearing next Wednesday, April 19, the same day as the
League's Legislative Action Day.
Please let me know if you haven any questions.
Jeff
ACTION ALERT! !
AB 1250 (Jones -Sawyer)
De Facto Ban on Local Government Contracts
OPPOSE
Background:
Back in 2014, the California State Assembly adopted HR 29 (Gomez) which the League strongly
opposed. HR 29 was a resolution that aimed to restrict local governments' ability to contract out for
services. While HR 29 was the blueprint, AB 1250 could potentially be the legislative vehicle that will
place substantial burdens on local agencies by adding onerous, over prescriptive and unnecessary
requirements that impede on local control and have significant impacts on local governance.
The new reporting requirements, privacy concerns, increased costs, and potential for litigation
created by this measure would place an overwhelming and significant burden on nearly every city
department and would create a de facto ban on virtually all contracting services.
AB 1250 would:
• Require a city, before entering a contract or renewing a contract, to perform a full economic
analysis of the potential impacts of outsourcing, including the impact on local businesses if
consumer spending power is reduced.
• Mandate a city to conduct a full environmental impact analysis caused by contracting for
the services.
• Force a city to conduct an annual audit of each contract.
As
Eliminate local agency hiring discretion by limiting a local agencies' ability to utilize a
contract for the sole purpose of cost savings through salaries and benefits.
Require that the agency provide an orientation to contract non -city employees.
Require a city to create a new, fully searchable database that must be posted on the city
website. Apart from the inherent cost drivers with this provision, there are significant privacy
concerns about posting full names, job titles, and salaries of non -city employees. This
database must include:
o The names, job titles, salary of each contracted non -city employee and
subcontractors.
o The services of the contract, the name of the agency department or division of the
city who manages the contract.
o The amount paid to the contract including the total projected cost of the contract for
all fiscal years and the funding source.
o The total number of "full time equivalent" employees being contracted out.
ACTION: AB 1250 will be heard on April 19, 2017 at gam in Assembly Public Employees.
Retirement and Social Security. If you have an Assembly Member on this committee, please
consider sending your CITY LETTER OF OPPOSITION as soon as possible. A sample letter is
attached or a letter may also be sent through the League's online Action Center.
ASSEMBLY PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL SECURITY
Member
District Party Room
Fax
Allen. Travis (Vice -Chair)
72 R� 4208
916 319 2172
Brough, William
73 R� 3141
916 319 2173
Cervantes. Sabrina
60 D� 5164
916 319 2160
Cooley. Ken
8 0 3013
916 319 2108
Cooper, Jim
9 D� 6025
916 319 2109
O'Donnell, Patrick
70 D� 2196
916 319 2170
Rodriguez. Freddie (Chair)
52 D� 2188
916 319 2152
You can find your Legislator's contact information here: http://findyourre�legislature.ca.gov/.
Talking Points:
• AB 1250 threatens the mission of local governments to provide vital local services in an
efficient and economical way.
City of and all California cities need to retain flexibility in how we deliver quality
services to residents. Less competition from innovative service providers will ultimately
mean a decrease in the quality of services provided to residents.
• Apart from the inherent cost drivers associated with developing and maintaining a database
of contractors, there are significant privacy concerns about posting full names, job titles and
salaries of non -city employees.
• Many contracts for services are with other local agencies; other contracts deliver specific
expertise that can assist a community. [Offer examples of how this flexibility benefits your
community.]
• Cities continue to face difficult budget conditions, which have been compounded by
expanding pension and retiree health care obligations. This builds upon existing
constitutional limitations on local agencies to raise additional revenue. Local agencies are in
no position to have their flexibility further curtailed.
• AB 1250 creates a series of new and burdensome reporting requirements prior to entering
or renewing a contract, such as, performing a full economic analysis of the potential impacts
of outsourcing, including the impact on local businesses, conducting a full environmental
impact analysis caused by contracting for the services, and requiring an annual audit of each
contract.
Having a local agency provide an additional orientation to non -city employees creates
significant cost and logistical concerns. For instance, AB 1250 requires that the agency
provide an orientation to contracted employees. Last year, AB 2835 (Cooper) which
mandated that public employers must provide an orientation to their own employees was
tagged at $350 million in ongoing costs by the California department of Finance. This is a
costly mandate on cities.
Jeffrey Kiernan
Regional Public Affairs Manager
League of California Cities®
8581 Santa Monica Blvd. *325
West Hollywood, CA 90069
Cell: (310) 630-7505
AB 1250: City and County Outsourcing
Summary:
AB 1250 is a common sense measure that will ensure
cities and counties adhere to due diligence standards
when opting to outsource public services.
Background:
Current law authorizes county outsourcing when
contracting out for "special services," such as: financial
and accounting, engineering, legal, medical,
architectural, therapeutic, airport or building security
matters, and laundry services. A county may also
outsource maintenance or custodial services if the site is
remote from available county employee resources.
In recent years, some cities and counties have sought to
outsource critical public services under the guise of
saving money. There have been many well-documented
instances of how short-sighted decisions to outsource
have had negative impacts on taxpayers.' While cheaper
services and employee layoffs may appear to save
dollars in the short term, the savings are often illusory
with hidden costs that are not accounted for and
diminished services or contractor failures that require
cities and counties to ultimately re -hire and/or re-train
staff to provide the outsourced service.
Need for Legislation:
In many sectors of government, California requires that
due diligence standards be satisfied prior to outsourcing
public services. Under current law for instance, state
agencies are required to show how outsourcing will
achieve savings, not cause the displacement of civil
service employees and ensure that contracts are awarded
through a publicized competitive bidding process.
Cities and counties are currently exempt from these
types of accountability measures. Given the scarcity of
tax dollars and the right of the public to demand and
receive quality public services, cities and counties
should be held to meaningful standards of due diligence.
This Bill:
http: //www.j wj. org/new-report-uncovers-the-real-costs-of-
outsourcing-public-services
AB 1250 establishes specific standards for the use of
personal services contracts by counties and cities.
Specifically, this bill:
Requires the city or county to clearly demonstrate
that the proposed contract will: 1) result in actual
overall costs savings to the city or county, and 2)
show that the contract does not cause the
displacement of county or city workers.
Authorizes a city or county to terminate any
outsourced contract upon material breach, if 30
days' notice is provided.
Requires the city or county to provide an orientation
to employees of the contractor who would perform
services pursuant to the contract.
Establishes liability provisions for employment law
violations and torts committed in the course of
providing services under contract.
Imposes additional disclosure requirements for
contracts exceeding $100,000 annually.
Requires each city or county to maintain on its
Internet Web site a searchable database of all of its
contracts exceeding $100,000.
Provides for various exceptions to the contracting
restrictions, including when services are: for
emergencies, temporary or occasional, or highly
technical or specialized and cannot be obtained from
the city's or county's own workforce.
Support:
Service Employees International Union — California
(Sponsor)
For More Information, Contact:
Charles Harvey
Office of Assembly Member Jones -Sawyer
(916) 319-2059
charles.harvey(kasm. ca. gov
Michelle Castro
SEIU California State Council
(916) 288-1455
mcastrokseiucal.org
AMENDED IN ASSEMBLY APRIL 4, 2017
CALIFORNIA LEGISLATURE -2o17-18 REGULAR SESSION
ASSEMBLY BILL
No. 1250
Introduced by Assembly Member Jones -Sawyer
February 17, 2017
An act to a --Mend Seet o 000 of Sections 31000.10, 31000.11,
37103.1, and 37103.2 to the Government Code, relating toffy
earttraets. local government.
LEGISLATIVE COUNSEL'S DIGEST
AB 1250, as amended, Jones -Sawyer.
mss. Counties and cities: contracts for personal services.
Existing law authorizes the board of supervisors of a county to
contract for special services on behalf of various public entities with
persons who are specially trained, experienced, expert, and competent
to perform the special services, as prescribed. These services include
financial, economic, accounting, engineering, legal, and other specified
services. Existing law also authorizes legislative bodies of cities to
contract with any specially trained and experienced person, firm, or
corporation for special services and advice in financial, economic,
accounting, engineering, legal, or administrative matters.
This bill would establish speck standards for the use of personal
services contracts by counties and cities. Beginning January 1, 2018,
the bill would allow a county or county agency, or a city, to contract
for personal services currently or customarily performed by county
employees, as applicable, when specified conditions are met. Among
other things, the bill would require the county or city to clearly
demonstrate that the proposed contract will result in actual overall
costs savings to the county or city and also to show that the contract
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AB 1250 —2—
does
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does not cause the displacement of county or city workers. The bill
would require a contract entered into under these provisions to specify
that it may be terminated upon material breach, if notice is provided,
as specified. Additionally, the bill would require the county or city to
provide an orientation to employees of the contractor who would
perform services pursuant to the contract, and would establish liability
provisions for employment law violations and torts committed in the
course of providing services under contract, among other conditions.
The bill would impose additional disclosure requirements for contracts
exceeding $100, 000 annually, would exempt certain types of contracts
from its provisions, and would require each county or city to maintain
on its Internet Web site a searchable database of all of its contracts
exceeding $100,000. By placing new duties on local government
agencies, the bill would impose a state -mandated local program.
The bill also would provide that its provisions are severable.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to the statutory
provisions noted above.
Existing law authorizes a eounty board of supervisors to eofttraet fo
This bill would ma-ke nottsttbstantive ehanges to that proViSiOtt
Vote: majority. Appropriation: no. Fiscal committee: eyes.
State -mandated local program: eyes.
The people of the State of California do enact as follows:
1 SECTION 1. Section 31000.10 is added to the Government
2 Code, to read:
3 31000.10. The purpose of this section and Section 31000.11
4 is to establish standards for the use ofpersonal services contracts
5 by counties.
6 (a) If otherwise permitted by law, a county or county agency
7 may contract for personal services currently or customarily
8 performed by county employees when all the following conditions
9 are met:
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—3— AB 1250
(1) The board of supervisors or county agency clearly
demonstrates that the proposed contract will result in actual
overall cost savings to the county for the duration of the entire
contract as compared with the county's actual costs of providing
the same services, provided that:
(A) In comparing costs, there shall be included the county's
additional cost of providing the same service as proposed by a
contractor. These additional costs shall include the salaries and
benefits of additional staff that would be needed and the cost of
additional space, equipment, and materials needed to perform the
function.
(B) In comparing costs, there shall not be included the county's
indirect overhead costs unless these costs can be attributed solely
to the function in question and would not exist if that function was
not performed in county service. Indirect overhead costs shall
mean the pro rata share of existing administrative salaries and
benefits, rent, equipment costs, utilities, and materials.
(C) In comparing costs, there shall be included in the cost of a
contractor providing a service any continuing county costs that
would be directly associated with the contracted function. These
continuing county costs shall include, but not be limited to, those
for inspection, supervision, and monitoring.
(2) Proposals to contract outwork shall not be approved solely
on the basis that savings will result from lower contractor pay
rates or benefits. Proposals to contract out work shall be eligible
for approval if the contractor's wages are at the industry's level
and do not significantly undercut county pay rates.
(3) The contract does not cause the displacement of county
employees. "Displacement" includes layoff, demotion, involuntary
transfer to a new class, involuntary transfer to a new location
requiring a change of residence, and time base reductions.
"Displacement" does not include changes in shifts or days off or
reassignment to other positions within the same class and general
location.
(4) The contract does not cause vacant positions in county
employment to remain unfilled.
(5) The contract does not
affirmative action efforts.
adversely affect the county's
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AB 1250
1 (6) The savings shall be large enough to ensure that they will
2 not be eliminated by private sector and county cost fluctuations
3 that could normally be expected during the contracting period.
4 (7) The amount of savings clearly justifies the size and duration
5 of the contracting agreement.
6 (8) The contract is awarded through a publicized, competitive
7 bidding process. The county shall reserve the right to reject any
8 and all bids or proposals.
9 (9) The contract includes specific provisions pertaining to the
10 qualifications of the staff that will perform the work under the
11 contract, as well as assurance that the contractor's hiringpractices
12 meet applicable nondiscrimination, affirmative action standards.
13 (10) The potential for future economic risk to the county from
14 potential contractor rate increases is minimal.
15 (11) The contract is with a firm. "Firm " means a corporation,
16 partnership, nonprofit organization, or sole proprietorship.
17 (12) The potential economic advantage of contracting is not
18 outweighed by the public's interest in having a particular function
19 performed directly by county government. Before executing a
20 contract for personal services under this section, the county shall
21 demonstrate that outsourcing the particular functions at issue is
22 in the public interest, addressing the cost of the contract, the cost
23 of administering the contract, the effect on the quality of services
24 provided to the public, and any other relevant circumstances.
25 (13) The contract shall provide that it maybe terminated at any
26 time by the county without penalty if there is a material breach of
27 the contract and notice is provided at least 30 days before
28 termination.
29 (14) The county shall provide an orientation to employees of
30 the contractor who will perform services pursuant to the contract.
31 The orientation shall include, but is not limited to, all of the
32 following:
33 (A) A description of the services to be provided pursuant to the
34 contract.
35 (B) A description of the function and goals of the public agency
36 responsible for providing the services in the absence of the
37 contract.
38 (C) Any applicable rules governing provision of the services
39 and how the employee may report violations of applicable rules
40 or contractual requirements.
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1 (1 S) The county shall be jointly and severally liable with the
2 contractor and any of its subcontractors for:
3 (A) Employment law violations arising from performance of the
4 contract, unless otherwise provided by a bona fide collective
5 bargaining agreement covering the affected employees.
6 (B) Torts committed by the contractor or its subcontractors in
7 the course of providing services under the contract.
8 (16) If the contract is for personal services in excess of one
9 hundred thousand dollars ($100, 000) annually, all of the following
10 shall occur:
11 (A) The county shall require the contractor to disclose all of
12 the following information as part of its bid, application, or answer
13 to a request for proposal:
14 (i) A description of all charges, claims, or complaints filed
15 against the contractor with any federal, state, or local
16 administrative agency during the prior 10 years.
17 (ii) A description of all civil complaints filed against the
18 contractor in any state or federal court during the prior 10 years.
19 (iii) A description of all state or federal criminal complaints or
20 indictments filed against the contractor, or any of its officers,
21 directors, or managers, at any time.
22 (iv) A description of any debarments of the contractor by any
23 public agency or licensing body at any time.
24 (v) The total compensation, including salaries and benefits, the
25 contractor provides to workers performing work similar to that to
26 be provided under the contract.
27 (vi) The total compensation, including salaries, benefits, options,
28 and any other form of compensation, provided to the five highest
29 compensated officers, directors, executives, or employees of the
30 contractor.
31 (vii) Any other information the county deems necessary to ensure
32 compliance with this section.
33 (B) Prior to entering into the contract, the county shall conduct,
34 and make public, a study of the potential impact of outsourcing
35 the work covered by the contract, including, but not limited to:
36 (i) The potential loss of employment opportunities within the
37 county and resultant loss of income to workers.
38 (ii) The economic impact on local businesses if consumer
39 spending power is reduced as a result of reduced wages under the
40 contract.
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AB 1250
1 (iii) The impact on the county's ability to provide social services
2 and the effect of any reduction in social services on county
3 residents.
4 (iv) Any environmental impact caused by contracting for the
5 services at issue.
6 (C) The contract shall provide that the county is entitled to
7 receive a copy of any records related to the contractor's or any
8 subcontractor's performance of the contract, and that any of those
9 records shall be subject to the California Public Records Act
10 (Chapter 3.5 (commencing with Section 6250) of Division 7 of
11 Title 1). In furtherance of this subdivision, contractors and any
12 subcontractors shall maintain records related to performance of
13 the contract that ordinarily would be maintained by the county in
14 performing the same functions.
15 (D) The county shall include in the contract speck, measurable
16 performance standards and provisions for a performance audit
17 by the county, or an independent auditor approved by the county,
18 to determine whether the performance standards are being met
19 and whether the contractor is in compliance with applicable laws
20 and regulations. The county shall not renew or extend the contract
21 prior to receiving and considering the audit report.
22 (E) The contract shall include provisions for an audit by the
23 county, or an independent auditor approved by the county, to
24 determine whether and to what extent the anticipated cost savings
25 have actually been realized. The county shall not renew or extend
26 the contract before receiving and considering the audit report.
27 (b) This section does not preclude a county from adopting more
28 restrictive rules regarding the contracting of public services.
29 (c) When otherwise permitted by law, the absence of any
30 requirement of subdivision (a) shall not prevent personal services
31 contracting when any of the following conditions are met:
32 (1) The contract is for a new county function and the Legislature
33 has specifically mandated or authorized the performance of the
34 work by independent contractors.
35 (2) The services contracted cannot be performed satisfactorily
36 by county employees, or are of such a highly specialized or
37 technical nature that the necessary expert knowledge, experience,
38 and ability are not available among county employees.
39 (3) The services are incidental to a contract for the purchase
40 or lease of real or personal property. Contracts under this
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1 criterion, known as "service agreements," shall include, but not
2 be limited to, agreements to service or maintain office equipment
3 or computers that are leased or rented.
4 (4) The legislative, administrative, or legal goals and purposes
5 cannot be accomplished through the utilization of county
6 employees. Contracts are permissible under this criterion to protect
7 against a conflict of interest or to ensure independent and unbiased
8 findings in cases where there is a clear need for a different, outside
9 perspective. These contracts shall include, but not be limited to,
10 obtaining expert witnesses in litigation.
11 (5) The nature of the work is such that the standards of this part
12 for emergency appointments apply. These contracts shall conform
13 with Section 31000.4.
14 (6) Public entities or officials need private counsel because a
15 conflict of interest on the part of the county counsel's office
16 prevents it from representing the public entity or official without
17 compromising its position. These contracts shall require the written
18 consent of the county counsel.
19 (7) The contractor will provide equipment, materials, facilities,
20 or support services that could not feasibly be provided by the
21 county in the location where the services are to be performed.
22 (8) The contractor will conduct training courses for which
23 appropriately quaked county employee instructors are not
24 available, provided that permanent instructor positions in
25 academies or similar settings shall be filled by county employees.
26 (9) The services are of such an urgent, temporary, or occasional
27 nature that the delay incumbent in their implementation by county
28 employees would frustrate their very purpose.
29 (d) All persons who provide services to a county under
30 conditions constituting an employment relationship shall by
31 employed directly by the county.
32 (e) (1) Except as provided in paragraph (2), this section shall
33 apply to all counties, including counties that have adopted a merit
34 or civil service system.
35 (2) This section does not apply to a charter county formed
36 pursuant to Section 3 ofArticle XI of the California Constitution.
37 ()9 (1) This section does not apply to any contract for services
38 described in Section 4525 or 4529.10.
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1 (2) This section does not apply to any contract that is subject
2 to Chapter I (commencing with Section 1720) of Part 7 of Division
3 2 of the Labor Code.
4 (3) This section does not apply to a contract for public transit
5 services, including paratransit services, if the county's transit
6 services are fully funded by Federal Transit Administration
7 assistance and the county is thereby subject to the guidelines
8 established in FTA Circular 4220. IF or any subsequent guidelines
9 or revisions issued by the Federal Transit Administration.
10 (g) This section shall apply to personal services contracts
11 entered into, renewed, or extended on or after January 1, 2018.
12 SEC. 2. Section 31000.11 is added to the Government Code,
13 to read:
14 31000.11. (a) Each county shall maintain on its Internet Web
15 site a searchable database of all contracts of an annual value in
16 excess of one hundred thousand dollars ($100, 000) entered into
17 pursuant to Section 31000.10. The database shall include, but is
18 not limited to, the following:
19 (1) A description of the services provided under the contract.
20 (2) The name of the agency, department, or division responsible
21 for providing the service in the absence of the contract.
22 (3) The name of the contractor and any subcontractors providing
23 services under the contract.
24 (4) The effective and expiration dates of the contract.
25 (5) The annual amount paid pursuant to the contract to the
26 contractor in the past three fiscal years and the currentfiscal year;
27 including the funding source for all amounts paid.
28 (6) The annual amount expected to be paid pursuant to the
29 contract to the contractor in the next three fiscal years.
30 (7) The total projected cost of the contract for all fiscal years
31 and the funding source for all amounts to be paid.
32 (8) The names of the employees of the contractor and any
33 subcontractors providing services pursuant to the contract and
34 their hourlypay rates, and the total number offull-time equivalent
35 positions involved in performing the services under the contract.
36 (9) The names of any workers providing services pursuant to
37 the contract as independent contractors and the compensation
38 rates for such workers.
39 (b) The information identified in subdivision (a) shall be
40 compiled in an annual service contractor expenditure budget
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1 accompanying the county budget, reflecting all spending on
2 personal services contracts by the county.
3 SEC. 3. Section 37103.1 is added to the Government Code, to
4 read:
5 37103.1. The purpose of this section and Section 37103.2 is to
6 establish standards for the use of personal services contracts by
7 cities.
8 (a) If otherwise permitted by law, a city may contract for
9 personal services currently or customarily performed by city
10 employees when all the following conditions are met:
11 (1) The city council or city agency clearly demonstrates that
12 the proposed contract will result in actual overall cost savings to
13 the city for the duration of the entire contract as compared with
14 the city's actual costs of providing the same services, provided
15 that:
16 (A) In comparing costs, there shall be included the city's
17 additional cost of providing the same service as proposed by a
18 contractor. These additional costs shall include the salaries and
19 benefits of additional staff that would be needed and the cost of
20 additional space, equipment, and materials needed to perform the
21 function.
22 (B) In comparing costs, there shall not be included the city's
23 indirect overhead costs unless these costs can be attributed solely
24 to the function in question and would not exist if that function was
25 not performed in city service. Indirect overhead costs shall mean
26 the pro rata share of existing administrative salaries and benefits,
27 rent, equipment costs, utilities, and materials.
28 (C) In comparing costs, there shall be included in the cost of a
29 contractorproviding a service any continuing city costs that would
30 be directly associated with the contracted function. These
31 continuing city costs shall include, but not be limited to, those for
32 inspection, supervision, and monitoring.
33 (2) Proposals to contract outwork shall not be approved solely
34 on the basis that savings will result from lower contractor pay
35 rates or benefits. Proposals to contract out work shall be eligible
36 for approval if the contractor's wages are at the industry's level
37 and do not significantly undercut city pay rates.
38 (3) The contract does not cause the displacement of city
39 employees. "Displacement" includes layoff, demotion, involuntary
40 transfer to a new class, involuntary transfer to a new location
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1 requiring a change of residence, and time base reductions.
2 "Displacement" does not include changes in shifts or days off or
3 reassignment to other positions within the same class and general
4 location.
5 (4) The contract does not cause vacant positions in city
6 employment to remain unfilled.
7 (5) The contract does not adversely affect the city's affirmative
8 action efforts.
9 (6) The savings shall be large enough to ensure that they will
10 not be eliminated by private sector and city cost fluctuations that
11 could normally be expected during the contracting period.
12 (7) The amount ofsavings clearly justifies the size and duration
13 of the contracting agreement.
14 (8) The contract is awarded through a publicized, competitive
15 bidding process. The city shall reserve the right to reject any and
16 all bids or proposals.
17 (9) The contract includes specific provisions pertaining to the
18 qualifications of the staff that will perform the work under the
19 contract, as well as assurance that the contractor's hiringpractices
20 meet applicable nondiscrimination, affirmative action standards.
21 (10) The potential for future economic risk to the city from
22 potential contractor rate increases is minimal.
23 (11) The contract is with a firm. "Firm " means a corporation,
24 partnership, nonprofit organization, or sole proprietorship.
25 (12) The potential economic advantage of contracting is not
26 outweighed by the public's interest in having a particular function
27 performed directly by city government. Before executing a contract
28 for personal services under this section, the city shall demonstrate
29 that outsourcing the particular functions at issue is in the public
30 interest, addressing the cost of the contract, the cost of
31 administering the contract, the effect on the quality of services
32 provided to the public, and any other relevant circumstances.
33 (13) The contract shall provide that it maybe terminated at any
34 time by the city without penalty if there is a material breach of the
35 contract and notice is provided at least 30 days before termination.
36 (14) The city shall provide an orientation to employees of the
37 contractor who will perform services pursuant to the contract. The
38 orientation shall include, but is not limited to, all of the following:
39 (A) A description of the services to be provided pursuant to the
40 contract.
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1 (B) A description of the function and goals of the public agency
2 responsible for providing the services in the absence of the
3 contract.
4 (C) Any applicable rules governing provision of the services
5 and how the employee may report violations of applicable rules
6 or contractual requirements.
7 (1 S) The city shall be jointly and severally liable with the
8 contractor and any of its subcontractors for:
9 (A) Employment law violations arising from performance of the
10 contract, unless otherwise provided by a bona fide collective
11 bargaining agreement covering the affected employees.
12 (B) Torts committed by the contractor or any of its
13 subcontractors in the course of providing services under the
14 contract.
15 (16) If the contract is for personal services in excess of one
16 hundred thousand dollars ($100, 000) annually, all of the following
17 shall occur:
18 (A) The city shall require the contractor to disclose all of the
19 following information as part of its bid, application, or answer to
20 a request for proposal:
21 (i) A description of all charges, claims, or complaints filed
22 against the contractor with any federal, state, or local
23 administrative agency during the prior 10 years.
24 (ii) A description of all civil complaints filed against the
25 contractor in any state or federal court during the prior 10 years.
26 (iii) A description of all state or federal criminal complaints or
27 indictments filed against the contractor, or any of its officers,
28 directors, or managers, at any time.
29 (iv) A description of any debarments of the contractor by any
30 public agency or licensing body at any time.
31 (v) The total compensation, including salaries and benefits, the
32 contractor provides to workers performing work similar to that to
33 be provided under the contract.
34 (vi) The total compensation, including salaries, benefits, options,
35 and any other form of compensation, provided to five highest
36 compensated officers, directors, executives, or employees of the
37 contractor
38 (vii) Any other information the city deems necessary to ensure
39 compliance with this section.
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1 (B) Prior to entering into the contract, the city shall conduct,
2 and make public, a study of the potential impact of outsourcing
3 the work covered by the contract, including, but not limited to:
4 (i) The potential loss of employment opportunities within the
5 city and resultant loss of income to workers.
6 (ii) The economic impact on local businesses if consumer
7 spending power is reduced as a result of reduced wages under the
8 contract.
9 (iii) The impact on the city's ability to provide social services
10 and the effect of any reduction in social services on city residents.
11 (iv) Any environmental impact caused by contracting for the
12 services at issue.
13 (C) The contract shall provide that the city is entitled to receive
14 a copy of any records related to the contractor's or any
15 subcontractor's performance of the contract, and that any such
16 records shall be subject to the California Public Records Act
17 (Chapter 5 (commencing with Section 6250) of Division 7 of Title
18 1). In furtherance of this subdivision, contractors and any
19 subcontractors shall maintain records related to performance of
20 the contract that ordinarily would be maintained by the city in
21 performing the same functions.
22 (D) The city shall include in the contract speck, measurable
23 performance standards and provisions for a performance audit
24 by the city, or an independent auditor approved by the city, to
25 determine whether the performance standards are being met and
26 whether the contractor is in compliance with applicable laws and
27 regulations. The legislative body shall not renew or extend the
28 contract prior to receiving and considering the audit report.
29 (E) The contract shall include provisions for an audit by the
30 city, or an independent auditor approved by the city, to determine
31 whether and to what extent the anticipated cost savings have
32 actually been realized. The city shall not renew or extend the
33 contract before receiving and considering the audit report.
34 (b) This section does not preclude a city from adopting more
35 restrictive rules regarding the contracting of public services.
36 (c) When otherwise permitted by law, the absence of any
37 requirement of subdivision (a) shall not prevent personal services
38 contracting when any of the following conditions are met:
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1 (1) The contract is for a new city function and the Legislature
2 has specifically mandated or authorized the performance of the
3 work by independent contractors.
4 (2) The services contracted cannot be performed satisfactorily
5 by city employees, or are of such a highly specialized or technical
6 nature that the necessary expert knowledge, experience, and ability
7 are not available among city employees.
8 (3) The services are incidental to a contract for the purchase
9 or lease of real or personal property. Contracts under this
10 criterion, known as "service agreements," shall include, but not
11 be limited to, agreements to service or maintain office equipment
12 or computers that are leased or rented.
13 (4) The legislative, administrative, or legal goals and purposes
14 cannot be accomplished through the utilization of city employees.
15 Contracts are permissible under this criterion to protect against
16 a conflict of interest or to ensure independent and unbiased
17 findings in cases where there is a clear need for a different, outside
18 perspective. These contracts shall include, but not be limited to,
19 obtaining expert witnesses in litigation.
20 (5) The nature of the work is such that the standards of this title
21 for emergency appointments apply. These contracts shall conform
22 with Section 45080.
23 (6) Public entities or officials need private counsel because a
24 conflict of interest on the part of the city attorney's officeprevents
25 it from representing the public entity or official without
26 compromising its position. These contracts shall require the written
27 consent of the city attorney.
28 (7) The contractor will provide equipment, materials, facilities,
29 or support services that could not feasibly be provided by the city
30 in the location where the services are to be performed.
31 (8) The contractor will conduct training courses for which
32 appropriately quaked city employee instructors are not available,
33 provided that permanent instructor positions in academies or
34 similar settings shall be filled by city employees.
35 (9) The services are of such an urgent, temporary, or occasional
36 nature that the delay incumbent in their implementation by city
37 employees would frustrate their very purpose.
38 (d) All persons who provide services to a city under conditions
39 constituting an employment relationship shall by employed directly
40 by the city.
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1 (e) (1) Except as provided in paragraph (2), this section shall
2 apply to all cities, including cities that have adopted a merit or
3 civil service system.
4 (2) This section does not apply to a charter city formed pursuant
5 to Section 3 of Article XI of the California Constitution.
6 )) (1) This section does not apply to any contract for services
7 described in Section 4525 or 4529.10.
8 (2) This section does not apply to any contract that is subject
9 to Chapter I (commencing with Section 1720) of Part 7 of Division
10 2 of the Labor Code.
11 (3) This section does not apply to a contract for public transit
12 services, including paratransit services, if the county's transit
13 services are fully funded by Federal Transit Administration
14 assistance and the county is thereby subject to the guidelines
15 established in FTA Circular 4220. IF or any subsequent guidelines
16 or revisions issued by the Federal Transit Administration.
17 (g) This section shall apply to personal services contracts
18 entered into, renewed, or extended on or after January 1, 2018.
19 SEC. 4. Section 37103.2 is added to the Government Code, to
20 read:
21 37103.2. (a) Each city shall maintain on its Internet Web site
22 a searchable database of all contracts of an annual value in excess
23 of one hundred thousand dollars ($100, 000) entered into pursuant
24 to Section 37103.1. The database shall include, but is not limited
25 to, thefollowing:
26 (1) A description of the services provided under the contract.
27 (2) The name of the agency, department, or division responsible
28 for providing the service in the absence of the contract.
29 (3) The name of the contractor and any subcontractors providing
30 services under the contract.
31 (4) The effective and expiration dates of the contract.
32 (5) The annual amount paid pursuant to the contract to the
33 contractor in the past three fiscal years and the currentfiscal year,
34 including the funding source for all amounts paid.
35 (6) The annual amount expected to be paid pursuant to the
36 contract to the contractor in the next three fiscal years.
37 (7) The total projected cost of the contract for all fiscal years
38 and the funding source for all amounts to be paid.
39 (8) The names of the employees of the contractor and any
40 subcontractors providing services pursuant to the contract and
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1 their hourly pay rates, and the total number offull-time equivalent
2 positions involved in performing the services under the contract.
3 (9) The names of any workers providing services pursuant to
4 the contract as independent contractors and the compensation
5 rates for such workers.
6 (b) The information identified in subdivision (a) shall be
7 compiled in an annual service contractor expenditure budget
8 accompanying the county budget, reflecting all spending on
9 personal services contracts by the county.
10 SEC. 5. The provisions of this act are severable. If any
11 provision of this act or its application is held invalid, that invalidity
12 shall not affect other provisions or applications that can be given
13 effect without the invalid provision or application.
14 SEC. 6. If the Commission on State Mandates determines that
15 this act contains costs mandated by the state, reimbursement to
16 local agencies and school districts for those costs shall be made
17 pursuant to Part 7 (commencing with Section 17500) of Division
18 4 of Title 2 of the Government Code.
19 SECT -!ON 1. Seetren1000 of theGovernment Codeis
20 amended to . ead.2
21 31000. The board of sWervisors may eontraet for speeial
22 serviees on behalf of the following pttblie entities 2 the eottnty, any
23 eottnty offieer or department, or any distriet or eottft in the eotnttr.
24 ,
25 .
26 The speeial sefviees shall eonsist of seffiees, adviee,
27 training for these pttblie entities or the etnployees thereof The
28 speeial serviees shall be in finaneial, eeon,
29 (ineluding the preparation and issuanee of
30 ,
31 arehiteetufal, aifport or building seetffity tnatters, lattndty
32
33 or ettstodial matters, if the board finds that the site : ote r
34 '
35
36-A44 F4 QI JA Qi Q
37 entployees. The board may pay Front any available fttnds
38 eontpensation as it deems proper for these speeial sevviees. The
39 ,
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