Bill Text: CA AB2557 | 2023-2024 | Regular Session | Amended

California Assembly Bill 2557

Bill Title: Local agencies: contracts for special services and temporary help: performance reports.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2024-06-17 - Read second time and amended. Re-referred to Com. on L., P.E. & R. [AB2557 Detail]

Download: California-2023-AB2557-Amended.html

Amended IN Senate June 17, 2024

Amended IN Senate June 05, 2024

Amended IN Assembly May 16, 2024

Amended IN Assembly April 25, 2024

Amended IN Assembly April 08, 2024

Amended IN Assembly March 21, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 2557

Introduced by Assembly Member Ortega

February 14, 2024

An act to add Sections 31000.01, 31000.4.5, 37103.1, and 53060.01 to the Government Code, relating to local agencies.

LEGISLATIVE COUNSEL'S DIGEST

AB 2557, as amended, Ortega. Local agencies: contracts for special services and temporary help: performance reports.

(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 each person who enters into a specified contract for special services with the board of supervisors to submit semiannual performance reports, as prescribed, every 180 days, to the board of supervisors and the employee organization. The bill would require such a contract to include prescribed provisions relating to the submission of semiannual performance reports and oversight of contract compliance by the board of supervisors or its representative. The bill would require contract terms exceeding 2 years to undergo a performance audit, as prescribed, by an auditor approved by the board to determine whether the performance standards are being met.
This bill would require, as of July 1, 2025, each board of supervisors that solicits for and enters into a specified contract for special services to post that contract and any related documents, as specified, on its internet website. The bill would require, as of July 1, 2026, each contract, as described above, to include, among other things, the objectives, desirables, and goals of the contract. The bill would require, before beginning a procurement process to contract for functions, duties, responsibilities, or services, as specified, the board of supervisors, or its representative, to give reasonable written notice to the exclusive employee representative of the workforce affected by the contract of its determination to begin that process. The bill would also require, at least 30 days before the modification or renewal of the above-described contract, the board of supervisors, or its representative, to notify, as specified, the exclusive employee representative of the workforce affected by the contract of the intent to modify or renew the contract.

(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 paragraph (1) for specified board contracts for temporary ~~help, with reports on a monthly basis.~~ 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 paragraph (1) for specified 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 paragraph (1) for specified legislative body contracts for special services.

(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.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

The people of the State of California do enact as follows:

SECTION 1.

The Legislature finds and declares all of the following:

(a) Local governments are increasingly relying on private contractors to provide public services customarily performed by the civil service workforce.

~~(b)The privatization of public services contributes to poverty and increasing income inequality through the decline of workers’ wages and benefits.~~
(b) The delivery of quality public services and goods requires a capable and efficient workforce who receives fair compensation.

(c) Transparent contracting processes allow for thorough public scrutiny to ensure that quality services and goods are delivered to California communities.

(d) There is a statewide interest in ensuring that public funds are used effectively and ethically and that the replacement of bargaining unit work with private contractors does not undermine public employee relations.

SEC. 2.

Section 31000.01 is added to the Government Code, immediately following Section 31000, to read:

31000.01.

(a) As of July 1, 2025, each board of supervisors that solicits for and enters into a contract under Section 31000 for functions that are currently, or were in the prior five years, performed by employees of the county represented by an employee organization, as defined in subdivision (a) of Section 3501, shall post that contract and any related documents, including performance reports that may be required by the contract, that are subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1) on its internet website.

~~(a)Each person who enters into a~~

(b) As of July 1, 2026, each contract with the board of supervisors pursuant to Section 31000 ~~to perform~~ for functions that are currently, or were in the prior five years, performed by employees of the county represented by an employee organization, as defined in subdivision (a) of Section 3501, shall ~~submit semiannual performance reports, every 180 days, to the board of supervisors and the employee organization.~~ include all of the following:

~~(b)The semiannual performance reports shall include all of the following:~~

(1) ~~A list of all contract objectives that describe the~~ The objectives, deliverables, and goals of the contract.

~~(2)A description of all deliverables the contractor has provided that include tangible and intangible services or goods that are measurable and produced as a result of the contract.~~
~~(3)A description of the contractor’s progress towards contract objectives identified in paragraph (1).~~
~~(4)~~

(2) A list of all financial expenditures ~~incurred for services provided,~~ associated with the delivery of contracted services, including, but not limited to, personnel costs, direct expenses, and indirect expenses, and their corresponding deliverables.

~~(5)~~

(3) The number of each contractor’s and subcontractor’s employees associated with the delivery of the contracted services, organized by job category, and the number of each contractor’s and subcontractor’s independent contractors associated with delivery of the contracted services organized by job category.

~~(6)~~

(4) (A) The names of any subcontractors providing services under the contract.

(B) The hourly rates, total compensation, and pay scales of employees and independent ~~contractors,~~ contractors providing services under the contract, organized by job classification.

(c)(1)A contract subject to this section shall include a provision that requires the contractor to submit semiannual performance reports to the board of supervisors or its representative, as provided in this section.
(2)If the board of supervisors or its representative notifies the contractor that the semiannual performance report shows that the contractor is not fulfilling the contract objectives listed in paragraphs (1) to (6), inclusive, of subdivision (b), the contractor shall be required to submit a plan to achieve substantial compliance with the contract. The board of supervisors or its representative may reject the plan as insufficient and explain the reasons for the rejection and ask for additional compliance plans.
~~(3)The board of supervisors or its representative shall provide a copy of any notices of underperformance and substantial compliance plans to the employee organization.~~
~~(d)The semiannual performance reports shall not be required for contracts between governmental entities.~~
(e)Contract terms exceeding two years shall undergo a performance audit by an auditor approved by the board of supervisors, to determine whether the performance standards are being met. Audits shall be conducted at least one year before the contract expires or qualifies for renewal or extension. The auditor shall present the findings of the audit report during a public session of the board of supervisors. The board shall not renew or extend a contract before receiving and evaluating the audit report.
(c) (1) Before beginning a procurement process to contract for functions, duties, responsibilities, or services that are currently performed or were in the previous five years performed by employees of the county represented by an employee organization, as defined in subdivision (a) of Section 3501, the board of supervisors, or its representative, shall give reasonable written notice to the exclusive employee representative of the workforce affected by the contract of its determination to begin that process.
(2) A notification shall explain the proposed contract, the justification for the contract, the expected length of the contract, and the effect on represented classifications.
(3) This subdivision shall not apply in the event of an emergency.
(d) At least 30 days before the modification or renewal of a contract specified in subdivision (c), the board of supervisors, or its representative, shall notify, in writing, the exclusive employee representative of the workforce affected by the contract of the intent to modify or renew the contract.
~~(f)~~

(e) The contract shall provide that all records provided to the county by the contractor shall be subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) 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.

~~(g)~~

(f) For purposes of this section, the following definitions apply:

(1) “Deliverables” means the agreed upon services set forth in the contract, the expected rate of delivery, and the success of those services.

(2) “Emergency” means a situation where immediate acquisition is necessary for the protection of the public health, welfare, or safety.
~~(2)~~

(3) “Total compensation” means the complete payment provided to a contracted employee throughout the duration of the contract, including, but not limited to, applicable hourly pay, overtime pay, benefits, and retirement.

~~(h)~~

(g) The provisions of this section are severable. If any provision of this section or its application is held invalid, the invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

~~(i)~~

(h) The Legislature finds and declares that ensuring that the replacement of bargaining unit work with contracted employees does not undermine public employee relations is a matter of statewide concern for purposes of Section 4 of Article XI of the California Constitution. Therefore, this section applies to all counties, including charter counties.

~~(j)~~

(i) This section shall apply on and after January 1, 2025. These amendments shall apply prospectively only and shall not be construed, applied, or otherwise interpreted to have any effect on or application to any contract entered into before January 1, 2025.

SEC. 3.

Section 31000.4.5 is added to the Government Code, immediately following Section 31000.4, to read:

31000.4.5.

(a) As of July 1, 2025, each board of supervisors that solicits for and enters into a contract under Section 31000.4 for functions that are currently, or were in the prior five years, performed by employees of the county represented by an employee organization, as defined in subdivision (a) of Section 3501, shall post that contract and any related documents, including performance reports that may be required by the contract, that are subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1) on its internet website.

~~(a)Each person who enters into a~~

(b) As of July 1, 2026, each contract exceeding 60 days with the board of supervisors pursuant to Section 31000.4 ~~to perform~~ for functions that are currently, or were in the prior five years, performed by employees represented by an employee organization, as defined in subdivision (a) of Section 3501, shall ~~submit monthly performance reports, every 30 days, to the funding agency and the employee organization.~~ include all of the following:

~~(b)The monthly performance reports shall include all of the following:~~

(1) ~~A list of all contract objectives that describe the~~ The objectives, deliverables, and goals of the contract.

~~(5)~~

(3) The number of each contractor’s and subcontractor’s employees associated with the delivery of the contracted services, organized by job category, and the number of each contractor’s and subcontractor’s independent contractors associated with the delivery of the contracted services, organized by job category.

~~(6)~~

(4) (A) The names of any subcontractors providing services under the contract.

(B) The hourly rates, total compensation, and pay scales of employees and independent ~~contractors,~~ contractors providing services under the contract, organized by job classification.

(c)(1)A contract subject to this section shall include a provision that requires the contractor to submit monthly performance reports to the board of supervisors or its representative, as provided in this section.
(2)If the board of supervisors or its representative notifies the contractor that the monthly performance report shows that the contractor is not fulfilling the contract objectives listed in paragraphs (1) to (6), inclusive, of subdivision (b), the contractor shall be required to submit a plan to achieve substantial compliance with the contract. The board of supervisors or its representative may reject the plan as insufficient and explain the reasons for the rejection and ask for additional compliance plans.
~~(3)The board of supervisors or its representative shall provide a copy of any notices of underperformance and substantial compliance plans to the employee organization.~~
~~(d)The monthly performance reports shall not be required for contracts between governmental entities.~~
(c) (1) Before beginning a procurement process to contract for functions, duties, responsibilities, or services that are currently performed or were in the previous five years performed by employees of the county represented by an employee organization, as defined in subdivision (a) of Section 3501, the board of supervisors, or its representative, shall give reasonable written notice to the exclusive employee representative of the workforce affected by the contract of its determination to begin that process.
(2) A notification shall explain the proposed contract, the justification for the contract, the expected length of the contract, and the effect on represented classifications.
(3) This subdivision shall not apply in the event of an emergency.
(d) At least 30 days before the modification or renewal of a contract specified in subdivision (c), the board of supervisors, or its representative, shall notify, in writing, the exclusive employee representative of the workforce affected by the contract of the intent to modify or renew the contract.

(e) The contract shall provide that all records provided to the

county by the contractor shall be subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) 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.

(f) For purposes of this section, the following definitions apply:

(1) “Deliverables” means the agreed upon services set forth in the contract, the expected rate of delivery, and the success of those services.

(2) “Emergency” means a situation where immediate acquisition is necessary for the protection of the public health, welfare, or safety.
~~(2)~~

(g) The provisions of this section are severable. If any provision

of this section or its application is held invalid, the invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

(h) The Legislature finds and declares that ensuring that the

replacement of bargaining unit work with contracted employees does not undermine public employee relations is a matter of statewide concern for purposes of Section 4 of Article XI of the California Constitution. Therefore, this section applies to all counties, including charter counties.

(i) This section shall apply on and after January 1, 2025. These

amendments shall apply prospectively only and shall not be construed, applied, or otherwise interpreted to have any effect on or application to any contract entered into before January 1, 2025.

SEC. 4.

Section 37103.1 is added to the Government Code, immediately following Section 37103, to read:

37103.1.

(a) As of July 1, 2025, each legislative body that solicits for and enters into a contract under Section 37103 for functions that are currently, or were in the prior five years, performed by employees of the city represented by an employee organization, as defined in subdivision (a) of Section 3501, shall post that contract and any related documents, including performance reports that may be required by the contract, that are subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1) on its internet website.

~~(a)Each person who enters into a~~

(b) As of July 1, 2026, each contract with the legislative body pursuant to Section 37103 ~~to perform~~ for functions that are currently, or were in the prior five years, performed by employees of the city represented by an employee organization, as defined in subdivision (a) of Section 3501, shall ~~submit semiannual performance reports, every 180 days, to the legislative body and the employee organization.~~ include all of the following:

~~(b)The semiannual performance reports shall include all of the following:~~

(1) ~~A list of all contract objectives that describe the~~ The objectives, deliverables, and goals of the contract.

~~(5)~~

(3) The number of each contractor’s and subcontractor’s employees associated with the delivery of the contracted services, organized by job category, and the number of each contractor’s and subcontractor’s independent contractors associated with the delivery of the contracted services, organized by job category.

~~(6)~~

(4) (A) The names of any subcontractors providing services under the contract.

(B) The hourly rates, total compensation, and pay scales of employees and independent ~~contractors,~~ contractors providing services under the contract, organized by job classification.

(c)(1)A contract subject to this section shall include a provision that requires the contractor to submit semiannual performance reports to the legislative body or its representative, as provided in this section.
(2)If the legislative body or its representative notifies the contractor that the semiannual performance report shows that the contractor is not fulfilling the contract objectives listed in paragraphs (1) to (6), inclusive, of subdivision (b), the contractor shall be required to submit a plan to achieve substantial compliance with the contract. The legislative body or its representative may reject the plan as insufficient and explain the reasons for the rejection and ask for additional compliance plans.
~~(3)The legislative body or its representative shall provide a copy of any notices of underperformance and substantial compliance plans to the employee organization.~~
~~(d)The semiannual performance reports shall not be required for contracts between governmental entities.~~
(e)Contract terms exceeding two years shall undergo a performance audit by an auditor approved by the legislative body, to determine whether the performance standards are being met. Audits shall be conducted at least one year before the contract expires or qualifies for renewal or extension. The auditor shall present the findings of the audit report during a public session of the legislative body. The legislative body shall not renew or extend a contract before receiving and evaluating the audit report.
(c) (1) Before beginning a procurement process to contract for functions, duties, responsibilities, or services that are currently performed or were in the previous five years performed by employees of the city represented by an employee organization, as defined in subdivision (a) of Section 3501, the legislative body, or its representative, shall give reasonable written notice to the exclusive employee representative of the workforce affected by the contract of its determination to begin that process.
(2) A notification shall explain the proposed contract, the justification for the contract, the expected length of the contract, and the effect on represented classifications.
(3) This subdivision shall not apply in the event of an emergency.
(d) At least 30 days before the modification or renewal of a contract specified in subdivision (c), the legislative body, or its representative, shall notify, in writing, the exclusive employee representative of the workforce affected by the contract of the intent to modify or renew the contract.
~~(f)~~

(e) The contract shall provide that all records provided to the city by the contractor shall be subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) 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.

~~(g)~~

(f) For purposes of this section, the following definitions apply:

(1) “Deliverables” means the agreed upon services set forth in the contract, the expected rate of delivery, and the success of those services.

(2) “Emergency” means a situation where immediate acquisition is necessary for the protection of the public health, welfare, or safety.
~~(2)~~

~~(h)~~

~~(i)~~

(h) The Legislature finds and declares that ensuring that the replacement of bargaining unit work with contracted employees does not undermine public employee relations is a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this section applies to all cities, including charter cities.

~~(j)~~

SEC. 5.

Section 53060.01 is added to the Government Code, immediately following Section 53060, to read:

53060.01.

(a) As of July 1, 2025, each legislative body that solicits for and enters into a contract under Section 53060 for functions that are currently, or were in the prior five years, performed by employees of the corporation or district represented by an employee organization, as defined in subdivision (a) of Section 3501, shall post that contract and any related documents, including performance reports that may be required by the contract, that are subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1) on its internet website.

~~(a)Each person who enters into a~~

(b) As of July 1, 2026, each contract with a legislative body pursuant to Section 53060 ~~to perform~~ for functions that are currently, or were in the prior five years, performed by employees of the corporation or district represented by an employee organization, as defined in subdivision (a) of Section 3501, shall ~~submit semiannual performance reports, every 180 days, to the legislative body and the employee organization.~~ include all of the following:

~~(b)The semiannual performance reports shall include all of the following:~~

(1) ~~A list of all contract objectives that describe the~~ The objectives, deliverables, and goals of the contract.

~~(5)~~

(3) The number of each contractor’s and subcontractor’s employees associated with delivery of the contracted services, organized by job category, and the number of each contractor’s and subcontractor’s independent contractors associated with delivery of the contracted services, organized by job category.

~~(6)~~

(4) (A) The names of any subcontractors providing services under the contract.

(B) The hourly rates, total compensation, and pay scales of employees and independent ~~contractors,~~ contractors providing services under the contract, organized by job classification.

(c)(1)A contract subject to this section shall include a provision that requires the contractor to submit semiannual performance reports to the legislative body or its representative, as provided in this section.
(2)If the legislative body or its representative notifies the contractor that the semiannual performance report shows that the contractor is not fulfilling the contract objectives listed in paragraphs (1) to (6), inclusive, of subdivision (b), the contractor shall be required to submit a plan to achieve substantial compliance with the contract. The legislative body or its representative may reject the plan as insufficient and explain the reasons for the rejection and ask for additional compliance plans.
~~(3)The legislative body or its representative shall provide a copy of any notices of underperformance and substantial compliance plans to the employee organization.~~
~~(d)The semiannual performance reports shall not be required for contracts between governmental entities.~~
(e)Contract terms exceeding two years shall undergo a performance audit by an auditor approved by the legislative body, to determine whether the performance standards are being met. Audits shall be conducted at least one year before the contract expires or qualifies for renewal or extension. The auditor shall present the findings of the audit report during a public session of the legislative body. The legislative body shall not renew or extend a contract before receiving and evaluating the audit report.
(c) (1) Before beginning a procurement process to contract for functions, duties, responsibilities, or services that are currently performed or were in the previous five years performed by employees of the corporation or district represented by an employee organization, as defined in subdivision (a) of Section 3501, the legislative body, or its representative, shall give reasonable written notice to the exclusive employee representative of the workforce affected by the contract of its determination to begin that process.
(2) A notification shall explain the proposed contract, the justification for the contract, the expected length of the contract, and the effect on represented classifications.
(3) This subdivision shall not apply in the event of an emergency.
(d) At least 30 days before the modification or renewal of a contract specified in subdivision (c), the legislative body, or its representative, shall notify, in writing, the exclusive employee representative of the workforce affected by the contract of the intent to modify or renew the contract.
~~(f)~~

(e) The contract shall provide that all records provided to the legislative body by the contractor shall be subject to the California Public Records Act (Division 10 (commencing with Section 7920.000) 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.

~~(g)~~

(f) For purposes of this section, the following definitions apply:

(1) “Deliverables” means the agreed upon services set forth in the contract, the expected rate of delivery, and the success of those services.

(2) “Emergency” means a situation where immediate acquisition is necessary for the protection of the public health, welfare, or safety.
~~(2)~~

~~(h)~~

~~(i)~~

(h) The Legislature finds and declares that ensuring that the replacement of bargaining unit work with contracted employees does not undermine public employee relations is a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution and for purposes of Section 4 of Article XI of the California Constitution. Therefore, this section applies to all cities and all counties, including charter cities and charter counties.

~~(j)~~

SEC. 6.

If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.