HomeMy WebLinkAbout2017-06-13 - AGENDA REPORTS - STATE LEGISLATION: ASSEMBLY BILL 1250 (2)0
Agenda Item: 4
CITY OF SANTA CLARITA
Q) AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL: 1
P441)
DATE: June 13, 2017
SUBJECT: STATE LEGISLATION: ASSEMBLY BILL 1250
DEPARTMENT: City Manager's Office
PRESENTER: Masis Hagobian
RECOMMENDED ACTION
City Council adopt the Legislative Committee's recommendation to oppose Assembly Bill 1250
(Jones -Sawyer) and transmit position statements to Assembly Member Jones -Sawyer, Santa
Clarita's state legislative delegation, appropriate legislative committees, Governor Brown, and
the League of California Cities.
BACKGROUND
Authored by Assembly Member Reginald Jones -Sawyer (D -59 -Los Angeles), Assembly Bill
1250 establishes requirements for the use of personal service contracts by counties and cities.
Specifically, this bill:
1. Requires that proposals to contract out specific personal services must not be approved
solely on the basis that savings would result from lower contractor pay rates or benefits,
and that such proposals must be eligible for approval only if the contractor's wages are at
the industry's level and do not significantly undercut county or city pay rates.
2. Requires that contracts for specific personal services do not cause the displacement of
county or city employees, and specifies "displacement" to include layoff, demotion,
involuntary transfer to a new location requiring a change of residence, and time base
reductions, and not include changes in shifts, days off, reassignment to other positions
within the same class, and general location.
3. Exempts the following specific personal services from the requirements included in this
bill:
a. Architectural, landscape architectural, engineering, environmental, and land
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surveying services.
b. Construction project management services, including services provided by a
licensed architect, registered engineer, or licensed general contractor.
c. Construction projects, including alteration, demolition, installation, or repair work
of public infrastructure.
d. Irrigation, utility, reclamation, and improvement districts or services related to
street, sewer, or other improvement work under the direction and supervision or
by the authority of any public body.
e. Street sweeping services and solid waste handling services.
f Renewal of existing contracts that do not cause displacement of city employees,
nor reduce the number of employee positions.
4. Requires cities and counties to conduct an audit of a contract, if the contract exceeds
$100,000 annually, to determine whether cost savings have been realized and would
require the contractor to reimburse the cost of the audit.
5. Prohibits cities and counties from renewing or extending specific personal contract
services prior to receiving and considering the audit report.
Assembly Bill 1250 was amended since its review by the City Council Legislative Committee.
Amendments made to Assembly Bill 1250 include the following:
• Eliminates the requirement that cities and counties conduct a cost -benefit analysis and an
environmental impact report prior to entering into a contract.
• Eliminates the requirement that cities and counties provide an orientation to employees of
the contractor who will perform the personal services.
• Eliminates the requirement that cities and counties maintain an intemet database of
specific personal contracts, accessible to the public.
• Prohibits contractors from "building -in" the cost of the audit in their contract with a city
or county.
• Exempts from the requirements included in this bill, personal service contracts that are
between a city and another government entity for services to be performed by employees
of the other government entity.
• Exempts from the requirements included in this bill, street sweeping services and solid
waste handling services.
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Exempts from the requirements included in this bill, the renewal of existing personal
service contracts, if the contracts do not displace city employees or reduce city employee
positions.
Although amendments were made to Assembly Bill 1250, the bill still significantly impacts a
cities and counties contracting process.
The City processed 805 personal contracts in 2016, and as of May 9, 2017, the City has
processed 364 personal contracts in 2017. The most commonly utilized contracts by the City
include design consultants, engineering consultants, and construction management. While
Assembly Bill 1250 exempts many of the commonly utilized contracts that the City acquires, this
bill still has a significant impact on the City's overall contracting process.
City staff is in the process of researching the estimated number of contracts this bill would
impact, however the following three large contract services currently contracted with the City
have been identified as applicable to the standards required in this bill:
• Transit Services
o 244 positions for the management, operations, and maintenance of transit
services.
o Fiscal Year 2016-17 Cost Estimate: $19,599,946
• Landscape Maintenance Services
o 115 positions for services regarding the City's landscape maintenance.
o Fiscal Year 2016-17 Cost Estimate: $3,668,636
• Library Services
o 54 positions for library services.
o Fiscal Year 2016-17 Cost Estimate: $3,597,020.
The League of California Cities estimates that cities will have to pay $19,191 per contract to
conduct an audit.
On June 1, 2017, Assembly Member Jones -Sawyer announced on the Assembly Floor that he
will be amending Assembly Bill 1250 to remove cities from the bill. Due to the legislative
process, the bill could not be amended during its third reading on June 1, 2017. Therefore,
Assembly Member Jones -Sawyer has committed to amend the bill once it moves to the Senate.
Assembly Bill 1250 passed on June 1, 2017, (45-30-5), with Assembly Members Dante Acosta
and Tom Lackey voting against the bill. Assembly Bill 1250 will next be assigned to a
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committee in the State Senate for review. City staff expects the amendment to remove cities
from the bill to be made in the next month. Once the bill has been amended, staff will notify the
City Council at the soonest available time.
Notable Supporters
California State Council of the Service Employees International Union (Sponsor), California
Labor Federation, and Los Angeles County Professional Peace Officers Association
Notable Opponents
League of California Cities, City of Glendale (in addition to 53 other cities), and California
Chamber of Commerce
The City Council Legislative Committee met on May 19, 2017, and recommends that the City
Council adopt an "oppose" position for Assembly Bill 1250.
ALTERNATIVE ACTION
1. Adopt a "neutral" position on Assembly Bill 1250
2. Adopt a "support" position on Assembly Bill 1250
3. Take no action on Assembly Bill 1250
4. Refer Assembly Bill 1250 back to the Legislative Committee
5. Other action, as determined by the City Council
FISCAL IMPACT
The resources required to implement the recommended action are contained within the City of
Santa Clarita's adopted 2016/17 budget.
ATTACHMENTS
Assembly Bill 1250 (Jones -Sawyer)
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AMENDED IN ASSEMBLY APRIL 25, 2017
AMENDED IN ASSEMBLY APRIL 17, 2017
AMENDED IN ASSEMBLY APRIL 4, 2017
CALIFORNIA LEGISLATURE -2017-19 REGULAR SESSION
ASSEMBLY BILL No. 1250
Introduced by Assembly Member Jones -Sawyer
February 17, 2017
An act to add Sections 31000.10, 31000.11, 37103.1, and 37103.2
to the Government Code, relating to local government.
LEGISLATIVE COUNSEL'S DIGEST
AB 1250, as amended, Jones -Sawyer. 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 specific 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 or city agency,
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
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demonstrate
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demonstrate that the proposed contract will result in actual overall costs
savings to the county or city and also to show that the contract 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
, tmd would establish liability provisions fo
providing seffiees under eontraet, among other conditions. The bill
would require that the county or city conduct a cost -benefit analysis
prior to entering into the contract and would require the prospective
contractors to reimburse the cost of the analysis. The bill would also
require the county or city to conduct an audit of the contract to
determine whether cost savings have been realized and would require
the contractor to reimburse the cost ofthe audit. The bill would impose
additional disclosure requirements for contracts exceeding–$449,999
$5, 000, 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
$100,090. $5,000,000. 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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State -mandated local program: yes.
The people of the State of California do enact as follows:
1 SECTION 1. Section 3 1000. 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 of personal services contracts
5 by counties.
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(a) If otherwise permitted by law, a county or county agency
may contract for personal services currently or customarily
performed by county employees when all the following conditions
are met:
(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 out work 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.
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1 (5) The contract does not adversely affect the county's
2 affirmative action efforts.
3 (6) The savings shall be large enough to ensure that they will
4 not be eliminated by private sector and county cost fluctuations
5 that could normally be expected during the contracting period.
6 (7) The amount of savings clearly justifies the size and duration
7 of the contracting agreement.
8 (8) The contract is awarded through a publicized, competitive
9 bidding process. The county shall reserve the right to reject any
10 and all bids or proposals.
11 (9) The contract includes specific provisions pertaining to the
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qualifications of the staff that will perform the work under the
contract, as well as assurance that the contractor's hiring practices
meet applicable nondiscrimination, affirmative action standards.
(10) The potential for future economic risk to the county from
potential contractor rate increases is minimal.
(11) The contract is with a firm. "Firm" means a corporation,
partnership, nonprofit organization, or sole proprietorship.
(12) The potential economic advantage of contracting is not
outweighed by the public's interest in having a particular function
performed directly by county government. Before executing a
contract for personal services under this section, the county shall
demonstrate that outsourcing the particular functions at issue is in
the public interest, addressing the cost of the contract, the cost of
administering the contract, the effect on the quality of services
provided to the public, and any other relevant circumstances.
(13) The contract shall provide that it maybe terminated at any
time by the county without penalty if there is a material breach of
the contract and notice is provided at least 30 days before
termination.
(14) The county shall provide an orientation to employees of
the contractor who will perform services pursuant to the contract.
The orientation shall include, but is not limited to, all of the
following:
(A) A description of the services to be provided pursuant to the
contract.
(B) A description of the function and goals of the public agency
responsible for providing the services in the absence of the contract.
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1 (C) Any applicable rules governing provision of the services
2 and how the employee may report violations of applicable rules
3 or contractual requirements.
4 (15) 44te eotutty shall be joitttly tmd severally liable with the
5 eotttraetor and tmy of its subeontraetors for:
6 (A) Employment law violations afising from pet4ermtmee o
7 the eontraet, unless otherwise provided by a botitt fide eolleetive
8 bafgaitting agreemettt eovering the afFeeted employees .
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10 the eourse of providing seff iees under the eotttf aet.
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12 (15) If the contract is for personal services in excess of one
13 hundred thousand dollars ($100,000) annually, all ofthe following
14 shall occur:
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(A) The county shall require the contractor to disclose all of the
following information as part of its bid, application, or answer to
a request for proposal:
(i) A description of all charges, claims, or complaints filed
against the contractor with any federal, state, or local administrative
agency during the prior 10 years.
(ii) A description of all civil complaints filed against the
contractor in any state or federal court during the prior 10 years.
(iii) A description of all state or federal criminal complaints or
indictments filed against the contractor, or any of its officers,
directors, or managers, at any time.
(iv) A description of any debarments of the contractor by any
public agency or licensing body at any time.
(v) The total compensation, including salaries and benefits, the
contractor provides to workers performing work similar to that to
be provided under the contract.
(vi) The total compensation, including salaries, benefits, options,
and any other form of compensation, provided to the five highest
compensated officers, directors, executives, or employees of the
contractor.
(vii) Any other information the county deems necessary to
ensure compliance with this section.
(B) Prior to entering into the contract, the county shall conduct,
and make public, a -Aid -a€ cost -benefit analysis considering the
potential impact of outsourcing the work covered by the
itieluding, but not limited : contract. The analysis shall include:
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1 (i) The potential loss of employment opportunities within the
2 county and resultant loss of income to workers.
3 (ii) The eeariomie impact on local businesses if consumer
4 spending power is reduced as a result of reduced wages under the
5 contract.
6 (iii) The impact on the county's ability to provide social services
7 and the effect of any reduction in social services on county
8 residents.
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(iv) Potential impacts on the environment, if any.
(C) Prospective contractors shall reimburse the county for the
cost of the cost -benefit analysis.
(D) The contract shall provide that the county is entitled to
receive a copy of any records related to the contractor's or any
subcontractor's performance of the contract, and that any of those
records shall be subject to the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of
Title 1). In furtherance of this subdivision, contractors and any
subcontractors shall maintain records related to performance of
the contract that ordinarily would be maintained by the county in
performing the same functions.
(E) The county shall include in the contract specific, measurable
performance standards and provisions for a performance audit by
the county, or an independent auditor approved by the county, to
determine whether the performance standards are being met and
whether the contractor is in compliance with applicable laws and
regulations. The county shall not renew or extend the contract prior
to receiving and considering the audit report.
(F) (1) The contract shall include provisions for an audit by
the county, or an independent auditor approved by the county, to
determine whether and to what extent the anticipated cost savings
have actually been realized. The county shall not renew or extend
the contract before receiving and considering the audit report.
(2) The contractor shall reimburse the county for the cost of the
audit.
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1 (b) This section does not preclude a county from adopting more
2 restrictive rules regarding the contracting of public services.
3 (c) When otherwise permitted by law, the absence of any
4 requirement of subdivision (a) shall not prevent personal services
5 contracting when any of the following conditions are met:
6 (1) The contract is for anew county function and the Legislature
7 has specifically mandated or authorized the performance of the
8 work by independent contractors.
9 (2) The contract is between the county and another government
10 entity for services to be performed by employees of the other
11 government entity.
12 f2)
13 (3) The services contracted cannot be performed satisfactorily
14 by county employees, or are of such a highly specialized or
15 technical nature that the necessary expert knowledge, experience,
16 and ability are not available among county employees.
17 f3)
18 (4) The services are incidental to a contract for the purchase or
19 lease of real or personal property. Contracts under this criterion,
20 known as "service agreements," shall include, but not be limited
21 to, agreements to service or maintain office equipment or
22 computers that are leased or rented.
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24 (5) The legislative, administrative, or legal goals and purposes
25 cannot be accomplished through the utilization of county
26 employees. Contracts are permissible under this criterion to protect
27 against a conflict of interest or to ensure independent and unbiased
28 findings in cases where there is a clear need for a different, outside
29 perspective. These contracts shall include, but not be limited to,
30 obtaining expert witnesses in litigation.
31 f3)
32 (6) The nature of the work is such that the standards of this part
33 for emergency appointments apply. These contracts shall conform
34 with Section 31000.4.
35 f6)
36 (7) Public entities or officials need private counsel because a
37 conflict of interest on the part of the county counsel's office
38 prevents it from representing the public entity or official without
39 compromising its position. These contracts shall require the written
40 consent of the county counsel.
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1 (7)
2 (8) The contractor will provide equipment, materials, facilities,
3 or support services that could not feasibly be provided by the
4 county in the location where the services are to be performed.
5 f8)
6 (9) The contractor will conduct training courses for which
7 appropriately qualified county employee instructors are not
8 available, provided that permanent instructor positions in academies
9 or similar settings shall be filled by county employees.
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(10) The services are of such an urgent, temporary, or occasional
nature that the delay incumbent in their implementation by county
employees would frustrate their very purpose.
(d) All persons who provide services to a county under
conditions constituting an employment relationship shall be
employed directly by the county.
(e) (1) Except as provided in paragraph (2), this section shall
apply to all counties, including counties that have adopted a merit
or civil service system.
(2) This section does not apply to a charter county formed
pursuant to Section 3 of Article XI of the California Constitution.
(f) (1) This section does not apply to any contract for services
described in Section 4525 or 4529.10.
(2) This section does not apply to any contract that is subject
to Chapter 1 (commencing with Section 1720) of Part 7 of Division
2 of the Labor Code.
(3) This section does not apply to a contract for public transit
services, including paratransit services, if the county's transit
services are fully funded by Federal Transit Administration
assistance and the county is thereby subject to the guidelines
established in FTA Circular 4220.1F or any subsequent guidelines
or revisions issued by the Federal Transit Administration.
(g) This section shall apply to personal services contracts entered
into, renewed, or extended on or after January 1, 2018.
SEC. 2. Section 31000.11 is added to the Government Code,
to read:
31000.11. (a) Each county shall maintain on its Internet Web
site a searchable database of all contracts of an annual value in
excess of five million
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1 dollars ($5,000,000) entered into pursuant to Section 31000.10.
2 The database shall include, but is not limited to, the following:
3 (1) A description of the services provided under the contract.
4 (2) The name of the agency, department, or division responsible
5 for providing the service in the absence of the contract.
6 (3) The name of the contractor and any subcontractors providing
7 services under the contract.
8 (4) The effective and expiration dates of the contract.
9 (5) The annual amount paid pursuant to the contract to the
10 contractor in the past three fiscal years and the current fiscal year,
11 including the funding source for all amounts paid.
12 (6) The annual amount expected to be paid pursuant to the
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contract to the contractor in the next three fiscal years.
(7) The total projected cost of the contract for all fiscal years
and the funding source for all amounts to be paid.
(8) The names of the employees of the contractor and any
subcontractors providing services pursuantto the contract and their
hourly pay rates, and the total number of full-time equivalent
positions involved in performing the services under the contract.
(9) The names of any workers providing services pursuant to
the contract as independent contractors and the compensation rates
for such workers.
(b) The information identified in subdivision (a) shall be
compiled in an annual service contractor expenditure budget
accompanying the county budget, reflecting all spending on
personal services contracts by the county.
SEC. 3. Section 37103.1 is added to the Government Code, to
read:
37103.1. The purpose of this section and Section 37103.2 is
to establish standards for the use of personal services contracts by
cities.
(a) If otherwise permitted by law, a city or city agency may
contract for personal services currently or customarily performed
by city employees when all the following conditions are met:
(1) The city council or city agency clearly demonstrates that
the proposed contract will result in actual overall cost savings to
the city for the duration of the entire contract as compared with
the city's actual costs of providing the same services, provided
39 that:
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1 (A) In comparing costs, there shall be included the city's
2 additional cost of providing the same service as proposed by a
3 contractor. These additional costs shall include the salaries and
4 benefits of additional staff that would be needed and the cost of
5 additional space, equipment, and materials needed to perform the
6 function.
7 (B) In comparing costs, there shall not be included the city's
8 indirect overhead costs unless these costs can be attributed solely
9 to the function in question and would not exist if that function was
10 not performed in city service. Indirect overhead costs shall mean
11 the pro rata share of existing administrative salaries and benefits,
12 rent, equipment costs, utilities, and materials.
13 (C) In comparing costs, there shall be included in the cost of a
14 contractor providing a service any continuing city costs that would
15 be directly associated with the contracted function. These
16 continuing city costs shall include, but not be limited to, those for
17 inspection, supervision, and monitoring.
18 (2) Proposals to contract out work shall not be approved solely
19 on the basis that savings will result from lower contractor pay rates
20 or benefits. Proposals to contract out work shall be eligible for
21 approval if the contractor's wages are at the industry's level and
22 do not significantly undercut city pay rates.
23 (3) The contract does not cause the displacement of city
24 employees. "Displacement" includes layoff, demotion, involuntary
25 transfer to a new class, involuntary transfer to a new location
26 requiring a change of residence, and time base reductions.
27 "Displacement" does not include changes in shifts or days off or
28 reassignment to other positions within the same class and general
29 location.
30 (4) The contract does not cause vacant positions in city
31 employment to remain unfilled.
32 (5) The contract does not adversely affect the city's affirmative
33 action efforts.
34 (6) The savings shall be large enough to ensure that they will
35 not be eliminated by private sector and city cost fluctuations that
36 could normally be expected during the contracting period.
37 (7) The amount of savings clearly justifies the size and duration
38 of the contracting agreement.
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1 (8) The contract is awarded through a publicized, competitive
2 bidding process. The city shall reserve the right to reject any and
3 all bids or proposals.
4 (9) The contract includes specific provisions pertaining to the
5 qualifications of the staff that will perform the work under the
6 contract, as well as assurance that the contractor's hiring practices
7 meet applicable nondiscrimination, affirmative action standards.
8 (10) The potential for future economic risk to the city from
9 potential contractor rate increases is minimal.
10 (11) The contract is with a firm. "Firm" means a corporation,
11 partnership, nonprofit organization, or sole proprietorship.
12 (12) The potential economic advantage of contracting is not
13 outweighed by the public's interest in having a particular function
14 performed directly by city government. Before executing a contract
15 for personal services under this section, the city shall demonstrate
16 that outsourcing the particular functions at issue is in the public
17 interest, addressing the cost of the contract, the cost of
18 administering the contract, the effect on the quality of services
19 provided to the public, and any other relevant circumstances.
20 (13) The contract shall provide that it maybe terminated at any
21 time by the city without penalty if there is a material breach of the
22 contract and notice is provided at least 30 days before termination.
23 (14) The city shall provide an orientation to employees of the
24 contractor who will perform services pursuantto the contract. The
25 orientation shall include, but is not limited to, all of the following:
26 (A) A description of the services to be provided pursuant to the
27 contract.
28 (B) A description of the function and goals of the public agency
29 responsible for providing the services in the absence of the contract.
30 (C) Any applicable rules governing provision of the services
31 and how the employee may report violations of applicable rules
32 or contractual requirements.
33 (15) 44te eity shall be jointly tmd severally liable with the
34 eotiftaetor and miy of its subeontraetors for:
35 (A) Employment law violations afising from pet4ermtmee o
36 the eontraet, unless otherwise provided by a botitt fide eolleetive
37 bafgaitting agreemeitt eovering the afFeeted employees.
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2 (15) If the contract is for personal services in excess of one
3 hundredthousand dollars ($100,000) annually, all of the following
4 shall occur:
5 (A) The city shall require the contractor to disclose all of the
6 following information as part of its bid, application, or answer to
7 a request for proposal:
8 (i) A description of all charges, claims, or complaints filed
9 against the contractor with any federal, state, or local administrative
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agency during the prior 10 years.
(ii) A description of all civil complaints filed against the
contractor in any state or federal court during the prior 10 years.
(iii) A description of all state or federal criminal complaints or
indictments filed against the contractor, or any of its officers,
directors, or managers, at any time.
(iv) A description of any debarments of the contractor by any
public agency or licensing body at any time.
(v) The total compensation, including salaries and benefits, the
contractor provides to workers performing work similar to that to
be provided under the contract.
(vi) The total compensation, including salaries, benefits, options,
and any other form of compensation, provided to the five highest
compensated officers, directors, executives, or employees of the
contractor.
(vii) Any other information the city deems necessary to ensure
compliance with this section.
(B) Prior to entering into the contract, the city shall conduct,
and make public, asttddq-a€ cost -benefit analysis considering the
potential impact of outsourcing the work covered by the
itieluding, but not limited : contract. The analysis shall include:
(i) The potential loss of employment opportunities within the
city and resultant loss of income to workers.
(ii) The eeariomie impact on local businesses if consumer
spending power is reduced as a result of reduced wages under the
contract.
(iii) The impact on the city's ability to provide social services
and the effect of any reduction in social services on city residents.
(iv) Potential impacts on the environment, if any.
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(C) Prospective contractors shall reimburse the city for the cost
of the cost -benefit analysis.
(D) The contract shall provide that the city is entitled to receive
a copy of any records related to the contractor's or any
subcontractor's performance of the contract, and that any such
records shall be subject to the California Public Records Act
(Chapter 5 (commencing with Section 6250) of Division 7 of Title
1). In furtherance of this subdivision, contractors and any
subcontractors shall maintain records related to performance of
the contract that ordinarily would be maintained by the city in
performing the same functions.
(E) (1) The city shall include in the contract specific,
measurable performance standards and provisions for a
performance audit by the city, or an independent auditor approved
by the city, to determine whether the performance standards are
being met and whether the contractor is in compliance with
applicable laws and regulations. The legislative body shall not
renew or extend the contract prior to receiving and considering
the audit report.
(2) The contractor shall reimburse the city for the cost of the
audit.
(F) The contract shall include provisions for an audit by the
city, or an independent auditor approved by the city, to determine
whether and to what extent the anticipated cost savings have
actually been realized. The city shall not renew or extend the
contract before receiving and considering the audit report.
(b) This section does not preclude a city from adopting more
restrictive rules regarding the contracting of public services.
(c) When otherwise permitted by law, the absence of any
requirement of subdivision (a) shall not prevent personal services
contracting when any of the following conditions are met:
(1) The contract is for a new city function and the Legislature
has specifically mandated or authorized the performance of the
work by independent contractors.
(2) The services contracted cannot be performed satisfactorily
by city employees, or are of such a highly specialized or technical
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1 nature that the necessary expert knowledge, experience, and ability
2 are not available among city employees.
3 (3) The services are incidental to a contract for the purchase or
4 lease of real or personal property. Contracts under this criterion,
5 known as "service agreements," shall include, but not be limited
6 to, agreements to service or maintain office equipment or
7 computers that are leased or rented.
8 (4) The legislative, administrative, or legal goals and purposes
9 cannot be accomplished through the utilization of city employees.
10 Contracts are permissible under this criterion to protect against a
11 conflict of interest or to ensure independent and unbiased findings
12 in cases where there is a clear need for a different, outside
13 perspective. These contracts shall include, but not be limited to,
14 obtaining expert witnesses in litigation.
15 (5) The nature of the work is such that the standards of this title
16 for emergency appointments apply. These contracts shall conform
17 with Section 45080.
18 (6) Public entities or officials need private counsel because a
19 conflict of interest on the part of the city attorney's office prevents
20 it from representing the public entity or official without
21 compromising its position. These contracts shall require the written
22 consent of the city attorney.
23 (7) The contractor will provide equipment, materials, facilities,
24 or support services that could not feasibly be provided by the city
25 in the location where the services are to be performed.
26 (8) The contractor will conduct training courses for which
27 appropriately qualified city employee instructors are not available,
28 provided that permanent instructor positions in academies or similar
29 settings shall be filled by city employees.
30 (9) The services are of such an urgent, temporary, or occasional
31 nature that the delay incumbent in their implementation by city
32 employees would frustrate their very purpose.
33 (d) All persons who provide services to a city under conditions
34 constituting an employment relationship shall be employed directly
35 by the city.
36 (e) (1) Except as provided in paragraph (2), this section shall
37 apply to all cities, including cities that have adopted a merit or
38 civil service system.
39 (2) This section does not apply to a charter city formed pursuant
40 to Section 3 of Article XI of the California Constitution.
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1 (f) (1) This section does not apply to any contract for services
2 described in Section 4525 or 4529.10.
3 (2) This section does not apply to any contract that is subject
4 to Chapter 1 (commencing with Section 1720) of Part 7 of Division
5 2 of the Labor Code.
6 (3) This section does not apply to a contract for public transit
7 services, including paratransit services, if the county's transit
8 services are fully funded by Federal Transit Administration
9 assistance and the county is thereby subject to the guidelines
10 established in FTA Circular 4220.1F or any subsequent guidelines
11 or revisions issued by the Federal Transit Administration.
12 (g) This section shall apply to personal services contracts entered
13 into, renewed, or extended on or after January 1, 2018.
14 SEC. 4. Section 37103.2 is added to the Government Code, to
15 read:
16 37103.2. (a) Each city shall maintain on its Internet Web site
17 a searchable database of all contracts of an annual value in excess
18 of otte Itundred thottstmd dollaf s five million dollars
19 ($5,000,000) entered into pursuant to Section 37103.1. The
20 database shall include, but is not limited to, the following:
21 (1) A description of the services provided under the contract.
22 (2) The name of the agency, department, or division responsible
23 for providing the service in the absence of the contract.
24 (3) The name of the contractor and any subcontractors providing
25 services under the contract.
26 (4) The effective and expiration dates of the contract.
27 (5) The annual amount paid pursuant to the contract to the
28 contractor in the past three fiscal years and the current fiscal year,
29 including the funding source for all amounts paid.
30 (6) The annual amount expected to be paid pursuant to the
31 contract to the contractor in the next three fiscal years.
32 (7) The total projected cost of the contract for all fiscal years
33 and the funding source for all amounts to be paid.
34 (8) The names of the employees of the contractor and any
35 subcontractors providing services pursuantto the contract and their
36 hourly pay rates, and the total number of full-time equivalent
37 positions involved in performing the services under the contract.
38 (9) The names of any workers providing services pursuant to
39 the contract as independent contractors and the compensation rates
40 for such workers.
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1 (b) The information identified in subdivision (a) shall be
2 compiled in an annual service contractor expenditure budget
3 accompanying the county budget, reflecting all spending on
4 personal services contracts by the county.
5 SEC. 5. The provisions of this act are severable. If any
6 provision of this act or its application is held invalid, that invalidity
7 shall not affect other provisions or applications that can be given
8 effect without the invalid provision or application.
9 SEC. 6. If the Commission on State Mandates determines that
10 this act contains costs mandated by the state, reimbursement to
11 local agencies and school districts for those costs shall be made
12 pursuant to Part 7 (commencing with Section 17500) of Division
13 4 of Title 2 of the Government Code.
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