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HomeMy WebLinkAboutMINUTES - 06021992 - 1.63 -' 1 ° 6 3 TO: BOARD OF SUPERVISORS ��= G Contra �.. FROM: Phil Batchelor, County Administrator � � Costa County DATE: err" May 28, 1992 SUBJECT: LEGISLATION: AB 2721 (Elder) SPECIFIC REQUEST(S)OR RECOMMENDATION(S)8 BACKGROUND AND JUSTIFICATION RECOMMENDATION: Adopt a position of OPPOSE UNLESS AMENDED in regard to AB 2721 by Assemblyman Elder and several co-authors, which would require the Board of Supervisors . in a 1937 Act County to provide 72 hours advance notice on a regularly scheduled agenda of any proposed increase in the salary or benefits of represented or unrepresented employees . The notice would have to occur prior to the effective date of the increase. Under specified circumstances, the proposed increase. would have to be accompanied by an estimate of the actuarial impact of the salary or benefit increase. BACKGROUND: There have apparently been some alleged abuses of the retirement system in Los Angeles County which have resulted in substantial unfunded liabilities for the retirement system. These have apparently resulted from suddenly counting all manner of benefits as "compensation" for retirement purposes which previously had not been considered "compensation" for retirement purposes . This resulting unfunded liability causes an increase in all future contributions for other employees as well as the employer. Assemblyman Elder has introduced AB 2721, apparently in an effort to curb these abuses . As is noted above, AB 2721 does the following: 1 . Requires that any proposed increase in salary or benefits of represented or unrepresented employees be placed on a regularly scheduled agenda for the Board of Supervisors and be posted at least 72 hours in advance. CONTINUED ON ATTACHMENT: X YES SIGNATURE: 1�&,Ilx56 /Awi ILI yy RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE 1L APPROVE OTHER SIGNATUREM: : ACTION OF BOARD ON jure 2, 1992 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS ^ 1..� I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. �f cc: County Administrator ATTESTED Retirement Administrator PHIL BAT ELOR,CLERK OF THE BOARD OF County Counsel SUPERVISORS AND COUNTY ADM%N%STRATOR Director of Personnel Risk Manager M382 I,o,ees Spahnn, SRJ. Jackson, Barish & Usociates� _ DEPUTY -2- 2 . Requires that the 72 hour notice precede the of fective date of the increase in salary or benefits . 3. Require that an enrolled actuary prepare an estimate of the actuarial impact of the salary or benefit increase which it can reasonable be assumed that the increase may exceed the greater of: A. The actuarial salary assumption employed by the retirement system; or B. The latest base year increase in the United States Department of Labor All Urban Consumers Consumer Price Index for the applicable area. Contra Costa County has always made a practice of scheduling notice of possible adoption of memoranda of understanding with represented employee organizations for regular scheduled meetings of the Board of Supervisors and of providing legal notice in advance of the possible consideration of such matters. However, Contra Costa County also typically negotiates salary and benefit changes over a period of several months . Once an existing memoranda of understanding expires, the Board of Supervisors has generally indicated its intent to adjust salary and benefits to be effective on a specified date. If this is done in advance of the proposed effective date, the County avoids a "gift of public funds" argument. It may then be several weeks or months before settlement is reached and ready to be ratified by the Board of Supervisors . The inability to provide for this notice of intent to make a settlement effective as of a date certain which ends up being somewhat retroactive would cause a substantial difficulty for the County in employee negotiations and would either require than negotiations be concluded as of an arbitrary date in the future or that employees forego salary and benefit increases for the period of time between the expiration of an agreement and the date notice of the adoption of a future agreement is posted. We recognize that Assemblyman Elder and the co-authors of AB 2721 are attempting to address a specific problem. We do not, however, believe that it appropriate to engage in legislative overkill by imposing the same restrictions on counties which have not suffered the same problems and where there is no evidence to indicate that the County has even tended in the same direction. We would, therefore, urge that Assemblyman Elder do one of two things: * Amend out the provision providing that the notice of the increase must be provided prior to the effective date of the salary or benefit increase, or * Amend the bill to apply only to Los Angeles County or such other counties as may have indicated by their actions a tendency to engage in the same type of unfair and inappropriate retirement benefit manipulation as Los Angeles County has been accused. In the absence of one of these amendments, we recommend that the Board of Supervisors oppose AB 2721 .