(1)Existing law relating to the government of counties authorizes a county board of supervisors to contract for certain types of special services on behalf of the county, any county officer or department, or any district or court in the county. Existing law requires those special services contracts to be with persons who are specially trained, experienced, expert, and competent to perform those services.

This bill would require the board or a representative, at least 10 months before beginning a procurement process to contract with persons for special services that are currently, or were in the previous 10 years, performed by employees of the county represented by an employee organization, to notify, in writing, the exclusive employee representative of the workforce affected by the contract of its determination to begin that process. The bill would provide that this 10-month notice requirement does not apply in the event of an emergency, as defined. The bill would require persons with whom the board of supervisors enter into a contract for special services to perform functions that are currently, or were in the previous 10 years, performed by employees of the county, any county officer or department, or any district or court in the county represented by an employee organization to use employees who meet or exceed the minimum qualifications and standards required of bargaining unit civil service employees who perform or performed the same job functions, as specified. The bill would also require those persons to provide information to the county sufficient to show that their employees meet the minimum qualifications and standards. The bill would specify that these provisions do not apply to contracts between governmental entities.

(2)Existing law authorizes a county board of supervisors to contract with temporary help firms for temporary help to assist county agencies, departments, or offices during any peak load, temporary absence, or emergency other than a labor dispute, if the board determines that it is in the economic interest of the county to do so. Existing law limits the use of temporary help to no more than 90 days for any single peak load, temporary absence, or emergency situation.

This bill would impose requirements similar to those described in (1) for board contracts for temporary help, except that notice must be provided 90 days before beginning a procurement process to contract for temporary help.

(3)Existing law relating to the government of cities authorizes the legislative body of a city 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 impose requirements similar to those described in (1) for city council contracts for special services.

(4)Existing law authorizes the legislative body of a public or municipal corporation or district to contract with persons performing special services in regard to financial, economic, accounting, engineering, legal, and administrative matters if those persons are specially trained and experienced and competent to perform the special services required.

This bill would impose requirements similar to those described in (1) for legislative body contracts for special services. The bill would clarify that special services include those for transit operation.

(5)The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all counties and cities, including charter counties and charter cities.

(6)By imposing new duties on local government agencies, the bill would create a state-mandated local program.

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 county board of supervisors to contract for special services on behalf of the county, any county officer or department, or any district or court in the county.

This bill would make nonsubstantive changes to that provision.

Date of Hearing: May 15, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2489

Author:(Ward) – As Amended Ver:April 29, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill requires a local government that wants to contract for certain services already performed by union employees to notify the union of its intent at least 10 months before beginning the process of procuring the contract, and requires a contractor to show that their employees meet or exceed the minimum qualifications and standards the local government requires of union employees.

Specifically, among other requirements, this bill requires a local government that wants to contract for special services or temporary help already performed by union employees to notify, in writing, the exclusive representative of the workforce, at least 10 months before beginning a procurement process to contract for special services that are currently, or were in the previous 10 years, performed by employees of the county, any county officer or department, or any district court in the county represented by an employee organization, of its determination to begin that process. This requirement does not apply in the event of an emergency. The bill defines “emergency” to mean a situation that calls for immediate action to respond to the threat of serious harm or mass casualties, including conditions of natural disaster or conditions posing extreme peril to the safety of persons or property in the territorial limits of the public agency.

The bill also requires a contractor to a local government provide information sufficient to show that their employees meet minimum qualifications and standards to perform the work. This information is to be retained by a local government for two years and is to be subject to the California Public Records Act.

FISCAL EFFECT:

Unknown, though potentially significant costs, to a local government to plan 10 months in advance of procuring a contract, to the extent it does not already plan this far ahead, provide certain notifications to its unions, maintain certain records, and respond to public records requests. Costs to local contracts could also increase, to the extent contractors no longer participate in local contracts as a result of this bill or a local contractor passes the costs of complying with this bill to local governments. According to this bill’s opponents, there are more than 4,800 local agencies in the state, most of which rely, at least in part, on contractors.

If the Commission on State Mandates determines the bill’s requirements to be a reimbursable state mandate, the state would need to reimburse these costs to local governments.

COMMENTS:

1. Background. Current law allows local governments to contract out for special services or temporary labor, if certain conditions are met. For example, special services contracts must be with persons who are specially trained, experienced, expert, and competent to perform those services and temporary labor contracts must be to assist local agencies, departments, or offices during any peak load, temporary absence, or emergency other than a labor dispute, if the local governing board determines that it is in the economic interest of the locality to do so.

This bill requires local governments provide certain notifications in instances of contracting for special services or temporary labor and requires a contractor to show proof of certain qualifications to a local government before entering into a contract.

1. Support and Opposition. This bill is sponsored by AFSCME, AFL-CIO, and the California Labor Federation, and supported by various labor organizations. AFSCME writes:

AB 2489 will require that private contractors of local public agencies at least meet the same qualifications and standards required of civil service employees who perform the same job functions if those functions are currently, or were previously in the past ten years, performed by the public agency’s employees…The requirement to have equal qualifications ensures that, at the very minimum, privately contracted workers are qualified to provide services even if the lower unionization rate in the private sector means lower wages and fewer benefits.

This bill is opposed by various administrative organizations, the League of California Cities, several nonprofit organizations, and others, who write:

Counties, cities, special districts, and schools are constantly challenged by the state to do more, to be more effective and efficient, to be accountable to the public for the resources that we are responsible for managing. Efforts like AB 2489 – along with a similar measure, AB 2557 by Assembly Member Liz Ortega – tie the hands of local agencies in their most basic administrative function. In doing so, the proposal sets local agencies up for failure – without reasonable tools to manage our constitutional and statutory obligations, there can be no expectation that local agencies make progress on the policy goals that the Legislature and Administration have set forth.

1. Related Legislation. AB 2557 (Ortega) requires a contractor who enters into a contract with a local government to perform functions that currently are or were performed by public employees represented by an employee organization to fulfill certain requirements. The bill is pending in this committee.

Analysis Prepared by: Natasha Collins / APPR. / (916) 319-2081

Date of Hearing: April 23, 2024

ASSEMBLY COMMITTEE ON JUDICIARY

Ash Kalra, Chair

ABPCA Bill Id:AB 2489

Author:(Ward) – As Amended Ver:March 21, 2024

As Proposed to be Amended

SUBJECT: Local agencies: contracts for special services and temporary help

KEY ISSUES:

1. should a local governing body that wants to contract for services already performed by union employees notify the union of its intent at least 10 months before beginning the procurement process?
2. should a contractor described in 1), above, be required to provide information to the loCal governing body showing that their employees meet or exceed the minimum qualifications and standards required of the union employees who perform the same job functions?

SYNOPSIS

According to the author, this bill seeks to ensure that when a local agency makes a contract for services that also are performed by represented local employees, that the workers who provide those services meet or exceed the qualifications of public employees in the local bargaining unit. The author and co-sponsors claim that employees who work for private contractors engaged by a local government do not have the same educational and professional experience as public employees, and that private contract workers are not subject to the same civil service exams, criminal background checks, or licensing requirements. For example, they claim that, “an employee of a private entity whose only experience in the mental health field is a college internship simply cannot provide the same level of service that a licensed and experienced civil servant can.” In short, the supporters of this bill contend that employees of nonprofits and private contractors do not provide the same level of service as unionized public servants, and furthermore they contend that local agency reliance on private contractors ultimately erodes the wages of public employees. As the California Professional Firefighters sums it up: “In an effort to save money, critical services are performed by underpaid and underqualified workers, putting Californians at risk.”

The local governments and nonprofits that oppose, or have concerns about, this bill point out, however, private contract workers and nonprofit workers are not all unqualified college interns. The nonprofits, in particular, observe that “our employees are held accountable to those who contract with us to ensure we are delivering on-time, quality, and affordable programs. Nearly all contracts are made public through the city and county legislative processes. . . We are troubled by any characterization that such partnership negatively impacts service provision and do not think that reflects reality.” Indeed the nonprofits conclude, “Californians trust nonprofits to deliver services by margins of as much as forty percentage points higher than the private sector or government.”

This analysis cannot evaluate the relative quality contract and nonprofit workers compared to public employees, and in fairness there is little evidence that could bolster one claim over the other. However, it does seem reasonable to believe that experienced public employees, if they do in fact have higher levels of education and experience, may perform better than private contract or nonprofit workers. On the other hand, as both local agencies opposing this bill and nonprofits expressing deep concerns about the bill point out, public contracts can, in fact, require necessary qualifications; and, moreover, some services provided by local governments and nonprofits may be better served by “lived experience” and “cultural competency” than people with college degrees who have passed a civil service exam. Finally, both the local governments and the nonprofits contend that requiring local government to provide a 10-month notice to the public employee’s bargaining unit before beginning the procurement process will be difficult, if not impossible, especially where conditions or existing legal requirements demand that the work be done sooner.

This bill recently passed out of the Assembly Committee on Public Employment and Retirement on a 4 to 2 vote. The bill is co-sponsored by AFSCME, SEIU California, and the California Labor Federation; it is supported by California Professional Firefighters and the Coalition of California Welfare Rights Organizations. The bill is opposed by a large group of organizations represented local governments, agencies, and districts. An alliance of nonprofit groups does not oppose, but has considerable concerns. The author will take an amendment in Committee to clarify the 10-month notice requirement does not apply in an “emergency,” as defined. The amendment is reflected in the bill summary and discussed in the analysis.

SUMMARY: Requires a local government that wants to contract for services already performed by union employees to notify the union of its intent at least 10 months before beginning the process of procuring the contract, and it requires the contractors to show that their employees meet or exceed minimum qualifications and standards required of union employees. Specifically, this bill:

1. Requires the board of supervisors or its representative to notify, in writing, the exclusive representative of the workforce, at least 10 months before beginning a procurement process to contract for special services that are currently, or were in the previous 10 years, performed by employees of the county, any county officer or department, or any district court in the county represented by an employee organization, of its determination to begin that process. This requirement does not apply in the event of an emergency, as defined.
2. Requires persons with whom the board of supervisors enter into a contract for special services to perform functions that are currently, or were in the previous 10 years, performed by employees of the county, any county officer or department, or any district or court in the county represented by an employee organization, to use employees who meet or exceed the minimum qualifications and standards required of bargaining unit civil service employees who perform or performed the same job functions, which may include, but are not limited to, the following qualifications and standards, as applicable:
   1. Criminal history and background checks before beginning employment;
   2. Academic attainment;
   3. Licensure;
   4. Years of experience;
   5. Child and elder abuse reporting;
   6. Physical requirements;
   7. Assessment exams;
   8. Performance standards.
3. Requires persons with whom the board of supervisors enter into a contract for special services to provide information to the county sufficient to show that their employees meet the minimum qualifications and standards described in 2), and requires them to retain this information for at least two years.
4. Requires a contract for special services subject to this subdivision to require that all records provided to the county pursuant to 3) be subject to the California Public Records Act (CPRA). Requires contractors and any subcontractors to maintain records related to performance of the contract that ordinarily would be maintained by the county in performing the same functions.
5. Exempts contracts between governmental entities from the requirements in 1) – 4).
6. Specifies that 5) does not limit the applicability of the CPRA to contracts between governmental entities.
7. Makes 1) – 4) applicable to contracts with persons for special services entered into on and after January 1, 2025. Specifies that 1) – 4) apply prospectively only and cannot be construed, applied, or otherwise interpreted to have any effect on or application to any contract entered into before the effective date of the act adding 1) – 4).
8. Defines the following for purposes of this bill:
   1. “Contract for special services” means a contract entered into by the board of supervisors pursuant to the specified subdivision of existing Government Code Section 31000.
   2. “Emergency” means a situation that calls for immediate action to respond to the threat of serious harm or mass casualties including conditions of natural disaster or conditions posing extreme peril to the safety of persons in the territorial limits of the public agency.
   3. “Employee organization” means the same as defined in the specified section of the Government Code.
9. Makes findings relevant to establishing the subject of this bill as a matter of statewide concern rather than municipal affair, sufficient to apply to all counties, including charter counties, and that the provisions of the bill supersede any inconsistent provisions in the charter of any county.

EXISTING LAW:

1. Authorizes the board of supervisors to contract for special services on behalf of the county, any county officer or department, or any district or court in the county. Establishes various requirements regarding these special services contracts including training and experience standards, types of contracts, and funding sources. (Government Code Section 31000. Unless otherwise specified all further references are to the Government Code.)
2. Authorizes the board of supervisors to contract with temporary help firms for temporary help to assist county agencies, departments, or offices during any peak load, temporary absence, or emergency other than a labor dispute, provided the board determines it is in the economic interest of the county to provide such temporary help by contract, rather than employing persons for such purpose. Limits use of temporary help to a period not to exceed 90 days for any single peak load, temporary absence or emergency situation. (Section 31000.4.)
3. Authorizes the legislative body of local governments 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 and authorizes them to pay compensation as it deems proper. (Section 37103.)
4. Authorizes the legislative body of any public or municipal corporation or district to contract with and employ any persons for the furnishing to the corporation or district special services and advice in financial, economic, accounting, engineering, legal, or administrative matters if they are specially trained and experienced and competent to perform the special services required. (Section 53060.)
5. Authorizes the state to enter into personal service contracts and specifies conditions for such contracts. (Section 191300.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: According to the author:

AB 2489 would require private contractors of local public agencies meet at least the same qualifications and standards required of civil service employees who perform the same job functions, if those functions are currently, or were previously in the past ten years, performed by the public agency’s employees. The bill would require private entities to show local governments their workforce complies with these requirements.

By requiring parity of employment standards, AB 2489 will level the playing field for the two-tier system that disadvantages qualified civil servants while also increasing the quality staff of, and performance by, local agencies.

What problem is this bill attempting to solve? According to the author, this bill seeks to ensure that when a local agency makes a contract for services that are also performed by represented local employees, that the workers who provide those services meet or exceed the qualifications of public employees in the local bargaining unit. The author and co-sponsors claim that employees who work for private contractors engaged by a local government do not have the same educational and professional experience as public employees, and that private contract workers are not subject to the same civil service exams, criminal background checks, or licensing requirements. For example, they claim that, “an employee of a private entity whose only experience in the mental health field is a college internship simply cannot provide the same level of service that a licensed and experienced civil servant can.” However, beyond this hypothesized anecdote, neither the author’s background material nor the letters provide any data that nonprofit and private contract workers are significantly less qualified than public workers or, more importantly, that differential qualifications have resulted in inadequate services or posed any danger to the public. Nor has evidence been provided to the Committee that the use of private contract or nonprofit contracts is increasing or, if so, whether this trend has had a measurable impact on the wages and benefits. This is not to deny that compelling evidence exists, but if it does, the evidence has not been provided to the Committee.

The local governments that oppose, and the nonprofits that have concerns with, the bill would not agree that all private contract and nonprofit workers are college interns. The nonprofits, in particular, claim that, “our employees are held accountable to those who contract with us to ensure we are delivering on-time, quality, and affordable programs. Nearly all contracts are made public through the city and county legislative processes. . . We are troubled by any characterization that such partnership negatively impacts service provision and do not think that reflects reality.” Indeed the nonprofits conclude, “Californians trust nonprofits to deliver services by margins of as much as forty percentage points higher than the private sector or government.” In fairness, the local governments and nonprofits do not provide concrete evidence on the nature of the employee qualifications, either. In fact, they concede that contract and nonprofit workers may not have the same educational and professional qualifications; but in some cases this may be a good thing, because it creates opportunities for marginal groups, or is consistent with other policy goals that designed to favor “lived experience” and/or “cultural competency” over formal educational and/or training.

The 10-month prior notice period. Both the local governments and the nonprofits contend that requiring the local government to provide a 10-month notice to the public employee bargaining unit before beginning the procurement process will be difficult if not impossible, especially where urgent conditions or existing legal requirements demand that the work be done sooner. The bill requires the local government to notify the relevant collective bargaining unit 10 months before the local government begins the “procurement process” for contracting for the special services. It is not entirely clear what the collective bargaining unit could do with this information once they obtain it. If the contract would displace public employees, then clearly there would be a dire need for workers to have this information in advance.

Related Legislation. Finally, AB 2557 (Ortega) is also before the Committee today for this hearing. Originally both this bill and AB 2557 contained provisions requiring the same 10-month notice period. Both bills, also amend the same sections of the Government Code. In addition to the 10-month notice provision, AB 2557, as in print, contains a provision that would require the contractor to submit “performance reports” to the local government. That bill will be amended today in this hearing to include only a modified version of the performance report requirement and be reorganized so the two measures no longer confusingly amend the same sections of existing law.

Proposed Author’s Amendment: In order to address the opposition concerns that the 10-month notice period could prevent a local government from responding to an emergency, the author proposes to add language to each relevant section clarifying that:

This requirement does not apply in the event of an emergency, as defined.”

The amendment will define “emergency” in each relevant section as follows:

“Emergency” means a situation that calls for immediate action to respond to the threat of serious harm or mass casualties including conditions of natural disaster or conditions posing extreme peril to the safety of persons in the territorial limits of the public agency.

ARGUMENTS IN SUPPORT: AFSCME, one of the bill’s co-sponsors, writes in support of the measure:

Across disciplines, civil service workers must meet several qualifications to ensure high-quality and professional service provision. These qualifications may include background and criminal history checks, licensures, years of professional experience, education, and reporting certification. Agencies can require public sector workers to meet performance and productivity benchmarks to monitor effectiveness. The public sector is also subject to transparency requirements and the Public Records Act, which adds further accountability.

By contrast, private entities that contract with local governments to provide services are not subject to the same qualification requirements. Employees of these entities do not have to meet the same licensing, training, or experience standards as public sector workers. This has massive ramifications in several policy areas that are priorities for the State. For example, an employee of a private entity whose only experience in the mental health field is a college internship simply cannot provide the same level of service that a licensed and experienced civil servant can. The same goes for workers in the housing, foster youth, and substance use treatment fields. Solutions to these societal issues require skilled and qualified workers.

AB 2489 will require that private contractors of local public agencies at least meet the same qualifications and standards required of civil service employees who perform the same job functions if those functions are currently, or were previously in the past ten years, performed by the public agency’s employees. The bill requires private entities to show local governments their workforce complies with these requirements.

The California Professional Firefighters (CPF) support this bill for similar reasons, though they consider specifically how this affects the profession. CPF writes that:

Public agencies, including fire departments, hire employees with extreme rigor to ensure the highest caliber of workers serving the people of California. This hiring process can include background checks, criminal history checks, high educational requirements, needed licensure, and more. Additionally, once those employees are hired, they are subject to ongoing performance reviews, audits, and accountability through transparency requirements.

However, the practice of contracting out services by local governments to private entities has resulted in a decline in the pay and benefits for those positions, as well as a lower level of expectations and qualifications. These contracted services include vital safety net programs for vulnerable populations, and the contracted entities are not required to hire according to any of the same guidelines or rigor that a public agency would. In an effort to save money, critical services are performed by underpaid and underqualified workers, putting Californians at risk.

While contracting is certainly a tool that may allow for a public agency to fill vacant positions more quickly than individual hiring, it cannot be done at the expense of the quality of service performed. AB 2489 would require that for any work that is done by a private contractor on behalf of a public agency, those workers must be held to the same high standards as a public employee for the same positions. In doing so, this measure ensures that the workers receive a fair and living wage for their work, while communities can be sure that their taxes are going to the highest quality workers possible.

ARGUMENTS IN OPPOSITION: A coalition for organizations representing local governments, agencies, and special districts (local agencies) strongly oppose this bill. They contend that like “previous legislative efforts that attempted to curb local agency authority for contracting, our organizations believe the proposal contained in AB 2489 is unnecessary and inflexible, likely resulting in worse outcomes for vulnerable communities and diminished local services for our residents.”

The local agencies have several concerns. First, they contend that the requirement that they notify the union 10 months prior to beginning the process of procuring the contract is unworkable. They note that the “special services” covered by this bill cover a broad array of services . . . from essential government administration services to medical and therapeutic services to legal and other technical services.” They point out that “local agencies often are unaware of a need for a procurement process 10 months prior. Such a situation could occur under any number of circumstances: from a labor dispute that results in a strike, a natural disaster, a global pandemic, emergency utility repairs, emergent and on-call situations, an unanticipated need to care for those crossing our southern border seeking asylum, and the list goes on.

Local agencies have proven their ability to be adaptable in times of need, but the 10-month timeframe and extensive range of services included in AB 2489 are both arbitrary and unworkable, impeding local agencies’ capacity to respond to local needs.”

The local agencies also oppose as unrealistic the requirement that “a contractor to ensure that its employees meet or exceed the minimum qualifications and standards required of bargaining unit civil service employees who perform or have performed the same job functions. . . We are concerned that these provisions would only serve to deter non-profit providers, community-based organizations, and other private service providers from engaging with local agencies, likely exacerbating existing demanding caseloads and workloads for our existing staff and driving up costs.” The local agencies point out as well that “minimum qualifications and standards are not fixed indefinitely, making comparison of those qualifications required by this bill difficult to achieve.”

Finally the local agencies note that in recent years, both the Legislature and the Governor’s Office have created mandates for local governments to provide various social services, and some of those programs require that the service be provided by people who have “lived experience” or “cultural familiarity” with the persons served. These services “include a role for non-profit, community-based, and private sector providers, sometimes specifically with individuals with different lived experience and expertise than those in a similar government job. Without that partnership, local agencies will be less successful in meeting the expectations and outcomes the state has directed – a consequence of which could be penalties and fines – and, in doing so, will have failed those that we are jointly committed to serve and undermine general trust in government.” The local agencies conclude that AB 2489 represents a sweeping change to the fundamental work of local governments, but we are unaware of a specific, current problem that this measure would resolve or prevent.”

CONCERNS: A large coalition of non-profit groups (nonprofits), while not opposing the bill, nonetheless express many serious concerns about it, not only with the specific provisions of the bill, but also with assumptions underlying the significant policy change proposed by this measure.

To begin with, the nonprofits contend that this bill runs contrary to recent efforts to achieve greater collaboration between local governments and nonprofits that existing local workforces cannot provide. “Starting in mid-2022,” the nonprofits note, “our organizations have been part of an informal coalition on government contracting to share ideas and advocate for improving the ways nonprofits and the state work together to use taxpayer dollars equitably, fairly, and efficiently in furtherance of our state’s health, human services, environmental, education, and other vital priorities.” In particular, the nonprofit coalition backed “the Nonprofit Equity Initiative package of seven bills introduced in 2023 thanks to a bipartisan set of legislators in both houses. Not a single state legislator voted against any of those bills, and we continue to advance several of those efforts in 2024. The message has been resoundingly clear thus far: legislators recognize that government cannot do it alone and must ensure the partnership with nonprofits is strong.”

The purpose of these initiatives, the nonprofit coalition maintains, was “to strengthen the partnership between nonprofits and government by authorizing contracting practices that support reaching more underserved communities and improving access, performance, and outcomes, by addressing long-standing contracting practices that make partnership too expensive for most organizations. The reality is that many nonprofits partnering with government must fundraise to subsidize the costs of those programs, because the government dollars simply do not go far enough relative to the need. Nonprofits continue to show up – in many cases only those with the capacity and resources to raise those additional funds – because we believe it’s our responsibility to serve our communities. Without us, people would suffer.”

As with the opposition letter of the local agencies, the nonprofits express uncertainty about what problem this bill is trying to solve. While nonprofit employees may not have the same qualifications as civil service employees, the nonprofits nonetheless contend that, “our employees are held accountable to those who contract with us to ensure we are delivering on-time, quality, affordable programs. Nearly all contracts are made public through the city and county legislative processes. . . We are troubled by any characterization that such partnership negatively impacts service provision and do not think that reflects reality.” “Indeed,” the nonprofits claims, “Californians trust nonprofits to deliver services by margins of as much as forty percentage points higher than the private sector or government.”

In addition to these general policy concerns and questions about the need for the legislation, the nonprofit coalition also is concerned with specific provisions of the bill. Most notably, they believe that the list of qualifications and standards that the nonprofit employees must meet will have unintended consequences. For example, they fear that the requirement for criminal background checks, “could reinforce hiring and workforce inequities, and that can create barriers for justice-impacted individuals.” In contrast, the nonprofit workforce “strives to provide opportunities to people who are excluded by certain hiring requirements, increasing our cultural competence and uplifting voices with lived expertise of the very problems we are tasked to confront. We would not want to retreat from these practices to qualify as contracted partners with local governments, as we want to continue to hire from members of historically marginalized communities.”

REGISTERED SUPPORT / OPPOSITION:

Support

American Federation of State, County and Municipal Employees (co-sponsor)

California Labor Federation (co-sponsor)

SEIU California (co-sponsor)

California Professional Firefighters

Coalition of California Welfare Rights Organizations

Opposition

American Council of Engineering Companies of California

American Institute of Architects California

American Public Works Association Region Viii

American Society of Civil Engineers, Region 9

American Staffing Association

Association of California Healthcare Districts (ACHD)

Association of California School Administrators

California Association of Recreational Park Districts

California Association of Sanitation Agencies

California Chamber of Commerce

California Geotechnical Engineers Association

California Special Districts Association

California State Association of Counties (CSAC)

California State Park Rangers Association

County Behavioral Health Directors Association of California

County Health Executives Association of California (CHEAC)

County Welfare Directors Association of California

League of California Cities

Rural County Representatives of California (RCRC)

Urban Counties of California (UCC)

Concerns

California Association of Nonprofits

California Council of Community Behavioral Health Agencies

California ReLeaf

Center for Nonprofit Management

CocoKids

Community Water Center

Inland Empire Community Collaborative

Koreatown Youth + Community Center

Meals on Wheels California

Nonprofit Finance Fund (NFF)

PATH

Rural Community Assistance Corporation

Santa Cruz Volunteer Center

Tree People

United Ways of California

Analysis Prepared by: Tom Clark / JUD. / (916) 319-2334

Date of Hearing: April 17, 2024

ASSEMBLY COMMITTEE ON PUBLIC EMPLOYMENT AND RETIREMENT

Tina S. McKinnor, Chair

ABPCA Bill Id:AB 2489 (

Author:Ward) – As Amended Ver:March 21, 2024

SUBJECT: Local agencies: contracts for special services and temporary help

SUMMARY: Makes changes to existing law relating to contracts by local governments (i.e., counties, cities, local public agencies, and municipal corporations) for certain services by requiring the local governing body, as prescribed, to provide written notice to the exclusive representative of the workforce affected by the contract, among other provisions. Specifically, this bill:

1. Relating to contracts by counties and cities for special services:
2. Requires the county board of supervisors (BOS), and legislative body of a city, or their respective representatives, as applicable, to notify in writing the exclusive representative of the workforce affected by the contract of its determination to begin a process of procurement at least 10 months prior to beginning the process to contract for services that are currently, or were in the previous 10 years, performed by civil service employees, as provided.
3. Requires persons with whom the BOS or legislative body of a city, as applicable, contracts for personal services to perform functions currently, or were in previous 10 years, performed by bargaining unit civil service employees, as provided, to use employees who meet or exceed the minimum qualifications and standards required of those public employees who perform or performed the same job functions, which may include, but not be limited to, certain prescribed qualifications and standards.
4. Requires persons with whom the BOS, or legislative body of a city, contracts for special services to provide information to the county or city, as applicable, sufficient to who that their employees meet the prescribed minimum qualifications and standards and to retain this information for at least two years.
5. Requires specified contracts to be subject to disclosure under the California Public Records Act (CPRA), as provided, and contractors and subcontractors to maintain records related to performance of the contract that ordinarily would be maintained by the county or city, as applicable.
6. Establishes that the above-described provisions do not apply to contracts between government entities, but does not limit the applicability of the CPRA to such contracts.
7. Provides that the above-described requirements apply to special services contracts entered into on or after January 1, 2025, and that the statute is intended to only prospectively apply and not be construed, applied, or interpreted to have any application or effect on contracts entered into prior to the effective date (i.e., January 1, 2025) of this proposed statute.
8. Relating to contracts by counties with temporary help firms:
9. Applies the same above-described provisions, except that with respect to such contracts, the BOS must, instead, notify the exclusive representative of the workforce affected by the contract at least 90 days before beginning the procurement process.
10. Defines, “contract for temporary help” to mean a contract entered into by the BOS, as provided.
11. Relating to contracts by cities for special services, including contracts for advice in financial, economic, accounting, engineering, legal, or administrative matters:
12. Applies the same described provisions under number 1), above, but as applied to the legislative body of a city, including records retention by a city, as prescribed.
13. Relating to contracts by local public agencies or municipal corporations for special services and advice in financial, economic, accounting, engineering, legal, or administrative matters:
14. Adds transit operations for which local public agencies or municipal corporations may contract for special services.
15. Applies the same described provisions under number 1), above, but as applied to the legislative body of a local public agency or municipal corporation, including records retention of such entities, as prescribed.
16. Defines “contract for special services,” contract for temporary help,” and “employee organization” for these purposes that respectively are applicable to the local government contracting authority affected by the provisions of this bill.
17. Expressly states legislative findings and declarations that the proposed statute addresses a matter of statewide concern, rather than a municipal affair. Therefore, the provisions of this proposed statute apply to all counties, cities, charter counties, and charter cities, in a manner that supersedes any inconsistent provisions in the charter of charter county or charter city.
18. Includes a severability clause to shield otherwise valid provisions from becoming invalid in the event of a successful legal challenge to the statute.

EXISTING LAW:

1. Authorizes a county board of supervisors (BOS) to contract for special services on behalf of the county, county officers or departments, or district courts in the county, and requires that the contract be with persons specially trained, experienced, and have expertise and competence to perform the special services, and establishes that special services consist of services, advice, education or training for financial, economic, accounting (including the preparation and issuance of payroll checks or warrants), engineering, legal, medical, therapeutic, administrative, architectural, airport or building security matters, laundry services, or linen services, and may include maintenance or custodial matters, as prescribed, among other provisions.^[1]
2. Authorizes the BOS to contract with temporary help firms for temporary help to assist county agencies, departments, or offices during any peak load, temporary absence, or emergency other than a labor dispute, provided that the BOS determines that is in the county’s economic interest to provide temporary help, rather than employ individuals for that purposes, and limits temporary help to 90 days or less for any single peak load, temporary absence, or emergency situation.^[2]
3. Authorizes the legislative body 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.^[3]
4. Authorizes the legislative body of any public or municipal corporation to contract with, and employ any persons for district special services and advice in financial, economic, accounting, engineering, legal, or administrative matters if such persons are specially trained, experienced and competent to perform the special services required, among other provisions.^[4]
5. Authorizes the state, county free libraries, school districts, and community college districts, respectively, to enter into personal services contracts, and establishes the conditions that must be met when procuring such contracts.^[5]

FISCAL EFFECT: Unknown. This bill is flagged as fiscal by Legislative Counsel.

COMMENTS:

1. Dual Referral

The committee is informed that this bill also is referred to the Assembly Committee on Judiciary.

1. Background: Need for the Bill

Information provided by the author states that, “[contracting] by local agencies is a common practice. However, at times…. contracting local agencies will hire on staff that are less qualified than the traditionally hired government employees. Not only does this create an imbalance with staff, it also reduces the skill of the employees. This bill will require contracted staff to be equivalently qualified as the traditional government employees. This can be achieved by requiring experience, education, and potentially testing parity when seeking contracted staff.”

1. Increasing Reliance by Public Employers on Contracting Out for Services

The committee is reminded of its informational hearing on May 10, 2023, titled “Strengthening California through the Public Sector and Its Workforce,” which focused on various subjects, including contracting out of public employee work.

During that hearing, the committee heard from a number of panelists, including experts from the University of California at Berkeley Labor Center, where data was provided and substantial concerns were expressed by other panelists about the ongoing and increasing reliance by public employers, including the state – as an employer, on a contingent, part-time, temporary, contracted out, or retired annuitant workforce to fill public sector vacancies, or to perform the duties of willing and capable existing and prospective public employees. These concerns also detailed how public employers are increasingly relying on these forms of employment and in a manner that has deleterious effects on wage growth, employee morale, employer-employee relations, and the need to ensure operational consistency and quality in the provision of services to the public that could be performed by permanent employees.

These concerns also detailed how public employers are increasingly relying on these forms of employment and in a manner that has deleterious effects on wage growth, employee morale, employer-employee relations, and the need to ensure operational consistency and quality in the provision of services to the public that could be performed by permanent employees.

Following the committee’s hearing last year, on April 17, 2024, the committee held another information relating to that subject titled: “Public Service Delivery and Workforce Wellbeing – Addressing the Vacancy Crisis in Local Government,” where civil service vacancies, impacts of vacancies on the civil service workforce and services, and collaborative solutions to address civil service vacancies, were discussed.

This bill represents one of those proposed solutions.

1. This Bill

This bill does not foreclose or bar local governments’ authority to contract for special services and other services, as authorized under existing law. Rather, by establishing standards as prescribed, it ensures that the contracted services: (a) meet the specific need for such services, (b) meet the expectations of the contracting authority to provide needed services appropriately given the expenditure of taxpayer monies; and, (c) raise contract, performance, and employment standards borne by the local government contracting authority and vendor to be adhered to in the interests of public transparency, accountability, and ensuring public safety, health, and welfare.

1. Conflict Notice: Information to the Author

The author is informed that the Office of Legislative Counsel has issued a conflict notice for this and Assembly Bill 2557 (Ortega, 2024).

A conflict exists when two or more bills and/or constitutional amendments amend, add, repeal, or amend and renumber the same section, article, chapter, division, title, or heading. The enactment of these measures in their present form could give rise to a serious legal problem that may be avoided by appropriate amendments.

Although both bills may be intended to be cooperatively operative, to prevent this from occurring, the author is advised to address this matter with appropriate amendments in the future.

1. Statement by the Author

The author states that, “[this bill] would require private contractors who perform services on behalf of a local agency to meet the same minimum qualifications required of civil service employees, if the services the private entity provides are currently or have been performed by a local agency’s employees.”

1. Comments by Supporters

Generally, supporters of this bill express that local civil service employees are required to meet specific minimum qualifications for employment, which may include licensure, and background/criminal history verification. In addition, local public agencies require these employees to undergo training, and meet certain performance standards as part of an evaluation. If they do not meet those standards, they may be disciplined since they are accountable to the agency.

They further state that when the functions, duties, or jobs that the civil servant provides are contracted to a non-civil service employee to provide those services, neither the contractor or its employees are held to the same standards, including wages rates and working conditions, and that such contracts are rarely evaluated before they are renewed or approved. As such, to maintain employment standards and the quality of public services provision, this bill is necessary.

1. Comments by Opponents

A number of entities representing local public agencies and others generally express that special services varies by the type of agency and covers a broad array of services. This bill, like its predecessors, attempts to curb local agency contracting authority through inflexible provisions that would likely result in worse outcomes for vulnerable communities and diminished services for local residents.

In addition, generally, they state that: (a) the 10-month notification requirement in this bill is an infeasible obligation as local agencies often are not aware of a procurement need prior to that time, such as during an emergency; (b) provisions regarding contractor minimum qualifications and CPRA records retention only serve to deter nonprofit providers, community-based organizations, and other private service providers from engaging with local agencies; thereby, exacerbating caseload and workload for existing staff, and increasing costs; (c) private employee data would be accessible to the public via the CPRA; (d) existing local public employer-employee relations laws cover contracting of bargaining unit work, with certain exceptions; and (e) where recent work by the Governor and Legislature directing local agencies to increase engagement with community partners to effectively connect with vulnerable communities to fill gaps in access to services, this bill represents a sweeping change to their fundamental work and sets up local agencies to fail.

1. Comments by Others

A number of nonprofit entities take exception with certain statements made by the author’s fact sheet regarding this bill, and express, generally, concerns regarding this bill relating to its inconsistent approach with current federal efforts to reduce unnecessary compliance costs, remove barriers to entry, ensure assistance serves intended communities, and increase transparency to strengthen nonprofit-government partnership.

In addition to providing examples of the services and positive outcomes of those services they provide in partnering with government, among other things, they express that because government and nonprofits are interdependent, and a successful partnership is critical to meeting Californian’s needs, they rely on government contracts to help achieve government policy, services, and program objectives. Because this bill imposes certain requirements, it could reinforce hiring inequities that also will create barriers for service recipients. In sum, and given these concerns, they want to work with the author and sponsors to find a cooperative path forward.

1. Prior or Related Legislation

Assembly Bill 2561 (McKinnor, 2024) proposed to require a local public agency to take prescribed actions relating to vacant positions, among other provisions. This bill is currently pending in the Assembly Committee on Public Employment and Retirement.

Assembly Bill 2557 (Ortega, 2024) proposes to makes changes to existing law relating to contracts by local governments (i.e., counties, cities, local public agencies, and municipal corporations) for certain services by requiring such contracts to include specific standards and requirements, among other provisions. This bill is currently pending in the Assembly Committee on Public Employment and Retirement.

Assembly Bill 1250 (Jones-Sawyer, 2017) proposed to establish specific standards for the use of personal service contracts by counties and cities, among other provisions. This bill was held by the Senate Committee on Rules.

Chapter 196, Statutes of 2013 (Assembly Bill 583, Gomez) requires the board of trustees, common council, or other legislative body of a city or the board of trustees of a library district in which a withdrawal from the county free library system becomes effective on or after January 1, 2012 to comply with specified requirements before entering into a contract to operate the city’s or the district’s libraries with a private contractor that will employ library staff to achieve cost savings, among other provisions.

Chapter 611, Statutes of 2011 (Assembly Bill 438, Williams) imposed specified requirements, until January 1, 2019, on a city or library district that intends to withdraw from a county free library system and operate libraries with a private contractor that will employ library staff to achieve cost savings.

Senate Bill 906 (Alarcon, 2003) proposed to establish standards for the use of personal service contracts by local government, similar to those of state government and school districts, for work currently or customarily performed by civil service employees. This bill failed passage by the Assembly.

Chapter 894, Statutes of 2002 (Senate Bill 1419, Alarcon) establishes standards for the use of personal service contracts in school and community college districts.

REGISTERED SUPPORT / OPPOSITION:

Support

American Federation of State, County and Municipal Employees, AFL-CIO (Co-sponsor)

California Labor Federation, AFL-CIO (Co-sponsor)

California State Council of the Service Employees International Union (Co-sponsor)

Coalition of California Welfare Rights Organizations

Orange County Employees Association

SMART – Transportation Division

Opposition

Association of California Healthcare Districts

California Chamber of Commerce

California Association of Recreation and Park Districts

California Association of Sanitation Agencies

California Special Districts Association

California State Association of Counties

California State Park Rangers Association

County Behavioral Health Directors Association

County Health Executives Association of California

County Welfare Directors Association of California

League of California Cities

Rural County Representatives of California

Urban Counties of California

Concerns

California Association of Nonprofits

California Council of Community Behavioral Health Agencies

California Releaf

Center for Nonprofit Management

CocoKids

Community Water Center

Inland Empire Community Collaborative

Koreatown Youth + Community Center

Nonprofit Finance Fund

PATH

Santa Cruz Volunteer Center

TreePeople

United Ways of California

Analysis Prepared by: Michael Bolden / P. E. & R. / (916) 319-3957

1. Section 31000 of the Government (Gov.) Code. ↑

2. Section 31000.4 of the Gov. Code. ↑

3. Section 37103 of the Gov. Code. ↑

4. Section 53060 of the Gov. Code. ↑

5. Sections 19130 et seq. of the Gov. Code. relating to the state, and Sections 19104.5 et seq., 45103.1 et seq., and 88003.1 et seq. of the Education Code related to county free libraries, school districts, and community college districts, respectively. ↑