LEGISLATION COMMITTEE
Meeting Date: April 16, 2024
Subject: AB 2557 (Ortega) and AB 2489 (Ward)
Submitted For: Legislation Committee
Department: County Administrator’s Office
Referral No:
Referral Name: AB 2557 and AB 2489
Presenter: Geoff Neill and Michelle Rubalcava, Nielsen Merksamer
Contact: L. DeLaney, 925-655-2057
Referral History:
AB 2557 (Ortega) and AB 2489 (Ward) are bills that have been flagged by the California State Association of Counties (CSAC) and the Urban Counties of California (UCC); the County’s state lobbyists have reached out for County input as well. CSAC has an “Oppose” position on AB 2557. The Board of Supervisors took an “Oppose” position on a related bill, AB 1250 from 2017.
The adopted 2023-24 State Legislative Platform includes the following policy:
“OPPOSE the establishment of specific or stricter standards for the use of personal services contracts by counties that would make contracting with community-based organizations more difficult.”
Referral Update:
While local governments are still analyzing these bills, it is clear that they would limit the ability of local agencies to contract for many services (likely including homelessness, health, behavioral health, and youth services), make it more expensive and cumbersome for many contractors to provide services to local agencies, and potentially give employee organizations a new role in preventing contractors from receiving payment in certain circumstances.
AB 2557 (Ortega) requires:
1. At least 10 months prior to a procurement process to contract for special services that are currently or in the past 10 years provided by a member of an employee organization, the governing body must notify the employee organization affected by the contract of its determination to begin a procurement process.
2. Each person who enters into a contract with the governing body to perform functions that are currently, or were in the prior 10 years, performed by employees of the local agency represented by an employee organization shall submit quarterly performance reports, every 90 days, to the governing body and the exclusive representative of the employee organization.
3. The quarterly performance reports shall include all of the following: (1) A list of contract objectives; (2) A description of all deliverables the contractor has provided as a result of the contract; (3) A description of the contractor’s progress towards contract objectives; (4) A list of all financial expenditures incurred for services provided, including personnel costs, direct expenses, and indirect expenses, and their corresponding deliverables; (5) The number of each contractor and subcontractor’s employees, organized by job category, sex, race, and ethnicity, and the number of each contractor and subcontractor’s independent contractors by job category, sex, race, and ethnicity; (6) The names of any subcontractors providing services under the contract and the names of the employees of the contractor and any subcontractors providing services pursuant to the contract; the hourly rates, total compensation, and pay scales for the individuals, including applicable hourly pay, overtime pay, benefits, and retirement, organized by job classification; the names of any workers providing services pursuant to the contract as independent contractors; the hourly rates, total compensation, and pay scales for the individuals, including, but not limited to, applicable hourly pay, overtime pay, benefits, and retirement, organized by job classification; (7) performance standard metrics for individual contractor and subcontractor employees performing work pursuant to the contract.
4. The governing body must monitor quarterly performance reports to evaluate the quality of services and must withhold payment to the contractor under any of the following circumstances, which constitute a breach of contract: (1) Three or more consecutive quarterly performance reports are deemed as underperforming by a representative of the governing body or a representative of the exclusive bargaining unit; (2) The contractor fails to provide the quarterly reports required by this section or provides a report that is incomplete. The governing body shall withhold further payments until all complete reports are provided. The governing body shall immediately resume making payments to the contractor, including all previously withheld payments unless, within a reasonable time, the governing body, the employee organization, or assigned representatives reject the reports as incomplete and explain the reasons for the rejection.
5. Contract terms exceeding two years must undergo a performance audit by an independent auditor approved by the governing body to determine whether the performance standards are being met. Audits must be conducted at least one year before the contract expires or qualifies for renewal or extension. The independent auditor shall present the findings of the audit report during a public session of the governing body. The governing body shall not renew or extend a contract before receiving and evaluating the audit report in conference with a representative of the exclusive bargaining unit. The contractor shall reimburse the governing body for the cost of the audit. A contractor shall not factor the costs of the audit into the contract costs with the governing body.
6. All provisions also apply to temporary workers, as well.
AB 2489 (Ward) requires:
1. At least 10 months prior to a procurement process to contract for special services that are currently or in the past 10 years provided by a member of an employee organization, the governing body must notify the employee organization affected by the contract of its determination to begin a procurement process.
2. Persons with whom the governing body 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 local agency must 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: (A) Criminal history and background checks before beginning employment; (B) Academic attainment; (C) Licensure; (D) Years of experience; (E) Child and elder abuse reporting; (F) Physical requirements; (G) Assessment exams; (H) Performance standards.
3. Persons with whom the governing body enters into a contract for special services must provide information to the local agency sufficient to show that their employees meet the minimum qualifications and standards described and must retain this information for at least two years.
4. All provisions also apply to temporary workers, as well.
Both AB 2489 and AB 2557 will be heard during a special order of the Assembly Public Employment and Retirement Committee on Wednesday, April 17.
AB 2489 (Ward) Local agencies: contracts for special services and temporary help: performance reports.
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History |
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04/01/2024 Re-referred to Com. on P.E. & R. |
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03/21/2024 Referred to Coms. on P.E. & R. and JUD. From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E. & R. Read second time and amended. |
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02/14/2024 From printer. May be heard in committee March 15. |
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02/13/2024 Read first time. To print. |
AB 2557 (Ortega) Local agencies: contracts for special services and temporary help.
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History |
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04/09/2024 Re-referred to Com. on P.E. & R. |
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04/08/2024 From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E. & R. Read second time and amended. |
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04/01/2024 Re-referred to Com. on P.E. & R. |
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03/21/2024 Referred to Coms. on P.E. & R. and JUD. From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E. & R. Read second time and amended. |
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02/15/2024 From printer. May be heard in committee March 16. |
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02/14/2024 Read first time. To print. |
See Attachment A for the text of the bills.
Recommendation(s)/Next Step(s):
CONSIDER recommending a position of “Oppose” to the Board of Supervisors on AB 2557 (Ortega) and AB 2489 (Ward).
Fiscal Impact (if any): Potentially significant but unknown at this time.