Client Alerts
City of Bell Scandal - Proposed Legislative Action
August 2010
Due to the recent City of Bell Scandal, various state legislators have proposed bills to try and combat the abuse which apparently took place in the City of Bell. It is anticipated that this legislation will be voted on before the end of the current session on August 27, 2010. This is a very quick summary and wording could change up to the actual vote.
SRC Special Counsel John Tamborelli has recently served as a panelist in ethics training compliance under AB 1234 to statewide public officials at the mid year CASA conference in Monterey and in practice has represented many city, county and district agencies in the area of public disclosure compliance, avoidance of conflicts of issue and compliance with the Brown Act. SRC provides guidance and counseling in this complex and ever changing area of public law to its public agency clients and is available to assist individual public officials or governmental agencies.
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AB 192 - AB 192 is an attempt to address the concern that excessive compensation paid to an employee may increase the pension liabilities of the former employers because the employee’s final salary will be based on the highest salary paid by the previous employer. This occurs as a result of reciprocity between retirement systems in government agencies and because within CalPERS, the employer rates of the previous employer are set at an amount that includes an unfunded liabilities created by increased salaries provided by the new employer.
AB 192 would make the agency that pays “Excessive Compensation” solely responsible for the increased retirement costs. The bill defines Excessive Compensation as anything paid in excess of 15 percent of the salary paid by the prior employer.
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AB 194 - AB 194 would establish a cap on the total compensation that may be used to calculate a pension benefit. Currently there is an IRS cap of $245,00 that applies to anyone who became a member of a public retirement system after June 30, 1996. The new state cap would be 125% of the Governor’s salary as of December 7, 2009 and would apply to anyone who becomes a member of a public retirement system on or after January 1, 2011. The Governor’s salary is $173,987 resulting in a new cap of $217, 483.
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AB 827- AB 827 would prohibit any employment contract for a local unrepresented employee for including the following:
An “evergreen” clause (a clause that provides for an automatic contract renewal and/or compensation increase);
A severance payment greater than 12 months salary; and
An automatic raise that excess a cost of living adjustment (COLA).
Further, prior to providing a raise in excess of COLA, an unrepresented employee that reports to the legislative body of a local agency:
that employee must be given a performance review;
a summary of the review must be discussed in open session;
the performance review must be made available to the public upon request; and
the vote to implement the raise must be made in open session.
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AB 2064 - AB 2064 would require public agencies to post the salaries of specified individuals on their official websites and update them on an annual basis. The specified individuals are:
Members of the Assembly, Senators and employees of each house of the legislature.
Constitutional officers, their appointed or exempt deputies and their appointed or exempt employees.
For cities, counties, special districts, school districts and joint power agencies: elected or appointed officials, superintendents, deputy superintendents, assistant superintendents, general managers, city mangers, county administrators and other similar chief administrative officers or executive officers.
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SB 501 - SB 501 would require an elected or appointed officer of a county, city and county, school district, special district or joint power agency who is also require to file a statement of economic interest (Form 700) to also complete a new form developed by the Secretary of State. The new form would include the disclosure of the following:
Annual salary or stipend.
Employer payments to the filers deferred compensation or defined benefit plans.
Automobile and equipment allowances.
Supplemental bonus payments.
Employer payments that he filer that are in excess of the standard benefits that the employer offers for all other employees.
As an alternative to individuals filing the new form, an agency that maintains a website may compile the information required for each filer and post that information on the internet.
