Disclosure of Elected Official and Public Employee Compensation

In the wake of the disclosure of excessive compensation paid in the City of Bell, the Legislature is considering several bills to require additional regulation and disclosure of total compensation of elected officials and public employees. 

AB 1955 (De La Torre) – Watch
As Amended on August 10, 2010

Assembly Bill 1955, by Assembly Member De La Torre, would require cities to provide the Attorney General with compensation information for the city council members to identify “excess compensation cities”. An “excess compensation city” would, among other things, be restricted in its ability to issue bonds or encumber funds and city council members would be taxed on the “excess income”. Of note to counties, AB 1955 would amend the Brown Act to clarify that individual employment contracts must be approved in open session and would require seven days notice before such a contract can be considered. 

AB 1955 passed the Senate Local Government Committee on August 12 and is awaiting a hearing in the Senate Appropriations Committee.

SB 501 (Correa) – Pending
As Amended on August 12, 2010

Senate Bill 501, by Senator Lou Correa, would require all officers and employees who are currently required to complete the Statement of Economic Interest (Form 700) as published by Fair Political Practices Commission to also complete a new form developed by the Secretary of State. The new form would include disclosure of the following:

• Salaries and stipends paid.
• Reimbursements received for expenses.
• The employer’s cost of providing benefits.
• Any other monetary or nonmonetary perquisites provided.
• Any items received as a result of membership with any local agency, municipal corporation, public benefit corporation, or community redevelopment agency.

Amendments to clarify the provisions of SB 501 are in negotiations and this bill is likely to be amended before it is heard on the Assembly Floor.

Other Bills

Two additional bills are expected from Assembly Member De La Torre, one that will address “Evergreen Contracts” that are allowed to automatically renew without public consideration and a second that will address a cap on what public pension systems can pay retirees. It is not clear how the pension cap will interplay with the existing Internal Revenue Service cap.
The following list outlines legislation that passed off the Senate and Assembly Appropriations Committees suspense files in a hearing that took place last Thursday. These bills will now move forward in the legislative process and be taken up for a vote on the Senate or Assembly Floor.

Retirement

AB 1987 (Ma) – Oppose
As Amended on June 1, 2010

Assembly Bill 1987, by Assembly Member Fiona Ma, would place limits on the final compensation calculation of any 1937 Act retirement system member not in a group or class for the purpose of determining their retirement allowance. Specifically, AB 1987 prohibits the member’s final compensation calculation from including any salary, compensation, or remuneration changes that were made with the intention of spiking their pension benefits. Additionally, the member’s final compensation calculation cannot include pay increases that are more than the average compensation increase employees in the same or similar group received in the final compensation period and the two years prior.

AB 1987 would require local and state retirement boards to adopt an ongoing audit process to ensure that any change in a member’s salary or compensation was not made to purposefully enhance their retirement benefits. The bill also includes a requirement of the county to report to the retirement board within 30 days of the following:

• A new pay item or a change in an existing pay item.
• A change in the status of any member resulting from a transfer, promotion, leave of absence, resignation, reinstatement, dismissal, or death.
• Any change that may impact the pay rate or special compensation of a member resulting from a Memorandum of Understanding.
• Any information concerning members with claims against the board. 

AB 1987 will codify the Ventura County decision and related settlements by requiring specified items of remuneration to be included as special compensation. 

The bill was amended in committee to remove a provision that CSAC opposed and would allow county retirement systems to become independent districts by resolution of the retirement board.

The bill also prohibits retirees within public pension systems from providing services to an employer covered by a state or local retirement system until the retiree has had a bona fide separation from service for at least six months. CSAC remains opposed to this provision.

AB 1987 will be heard next on the Senate Floor.

SB 1425 (Simitian) – Oppose Unless Amended
As Amended on August 12, 2010

Senate Bill 1425, by Senator Joe Simitian, amends the Public Employees Retirement Law and the State Teacher’s Retirement System law to limit those items that can be included in the calculation of final compensation for the purpose of prohibiting pension spiking; the bill also prohibits retirees within public pension systems from providing services to an employer covered by a state or local retirement system until the retiree has had a bona fide separation from service for at least six months.

Public Safety

AB 2151 (Torres) – Oppose
As Amended on July 15, 2010

Assembly Bill 2151, by Assembly Member Norma Torres, would exempt peace officers, members of the California Highway Patrol, and firefighters from a requirement to report accidents that occur in their personal vehicle to a personal insurance provider and instead report those accidents to their employer. 

AB 2151 would additionally provide that the employee’s private insurer or automobile insurer would not be required to provide defense or indemnification when the employee is involved in an accident in their personal vehicle. This would prohibit employers from accessing third party payers to cover some, or all, of the cost for such an accident.

Workers’ Compensation

AB 2253 (Coto) – Oppose
As Amended on May 28, 2010

Assembly Bill 2253, by Assembly Member Joe Coto, would lengthen the amount of time in which a safety member can file a worker’s compensation cancer claim with the presumption that the cancer is work-related to a maximum of 10 years following termination of employment.

Current law allows a public safety employee to file a claim under the presumption based on their time served on-the-job. Specifically, a firefighter or police officer receives three months of eligibility for every year of service with a maximum time-frame of five years to file a claim.