In August, we sent out an e-alert – The Legislature and a PERB ALJ Gang Up on Local Agencies That Have Adopted “COIN” Transparency Measures – regarding SB 331, the so-called “Civic Reporting Openness in Negotiations Act.” SB 331 was drafted at the behest of labor unions, and is clearly designed to discourage local agencies from enacting COIN (“Civic Openness in Negotiations”) ordinances. It also severely punishes local agencies that have adopted such ordinances, by intruding on their ability to award contracts for services over $250,000.
What Is a “COIN” Ordinance?
COIN ordinances mandate transparency measures whereby the content and costs of negotiations proposals must be publicly disclosed. They can take many forms, from comprehensive to minimalist. For SB 331 purposes, however, a COIN ordinance is defined extremely broadly. The Bill’s requirements would be met by all ordinances that include any of the following components:
- Independent economic analysis describing the fiscal costs of benefit and pay components;
- Review by the public of such independent analysis;
- Updates of the analysis involving the annual or cumulative costs of each proposal and providing public notice thereof;
- Updates of economic analysis relating to the employer’s unfunded liability for pension or postretirement health benefits;
- Reports on negotiation offers or counteroffers that a party made in labor negotiations and disclosure of the negotiation participants;
- Updates of analysis on actuarially computed unfunded liability associated with the pension or postretirement health benefits.
What Does SB 331 Do?
SB 331 puts roadblocks in the way of local “COIN” agencies that are considering approval of any contract for services valued over $250,000. As a precondition to adopting such a contract, it requires covered agencies to:
- Use an unbiased independent auditor to assess the contract costs;
- Wait 90 days between issuance of the auditor report and agency action on the contract, with an additional 90 days before any changes in contract language may become effective;
- Disclose to the public all offers and counteroffers in connection with the contract;
- Disclose within 24 hours any communications between agency staff and the contractor; and
- Hold a minimum of two meetings for public review and comment before adoption of the contract.
The breadth of contracts covered by these additional requirements is ridiculously extreme, including “accounting, financing, hardware and software maintenance, health care, human resources, human services, information technology, telecommunications, janitorial maintenance, legal services, lobbying, marketing, office equipment maintenance, passenger vehicle maintenance property leasing, public relations, public safety, social services, transportation, or waste removal.” The procedural requirements required by SB 331 would thus slow the procurement process for goods, increase the cost of services, and hamper the agency’s ability to obtain needed services for the public.
In short, SB 331 is a cynical attempt to discourage local agencies from adopting public accountability measures, by making the consequences of doing so impossibly onerous. It is fundamentally rooted in the deeply offensive idea that the Legislature should seek to discourage public agencies from understanding and making available to the public thoughtful analyses of the actual impacts of labor agreements.
What Can You Do?
As of September 11, this overbroad and burdensome bill has been passed by both the Senate and Assembly, and it is currently before the Governor for final signature or veto. Now is the time for all concerned public agencies to make their concerns and objections to SB 331 know, and to encourage the Governor to veto SB 331.
Please send your communications as soon as possible to:
Governor Jerry Brown
c/o State Capitol Building, Suite 1173
Sacramento, CA 95814
Fax # (916) 558-3160
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For more information, contact Jeff Sloan (jsloan@publiclawgroup.com, 415-678-3806), Jon Holtzman (jholtzman@publiclawgroup.com, 415-678-3807) or Justin Otto Sceva (jsceva@publiclawgroup.com, 415-848-7213)