One effective way to help ensure that cities and counties do not approve contracts that reward insiders and punish taxpayers is to adopt so-called “COIN” ordinances. COIN stands for civic openness in negotiations. These ordinances are particularly helpful when cities and counties are in negotiations with public employee unions to adopt or renew labor agreements. Key elements of COIN ordinances are the following:
- Independent Contract Negotiator – Agencies hire an independent negotiator not impacted by any outcome in the negotiation process. This avoids conflict where agency staff – subject to the same provisions as the bargaining unit they are negotiating with – negotiate on behalf of the Agency.
- Independent Contract Auditor – Under COIN, an agency’s independently elected Auditor-Controller or one engaged by the independent negotiator, will take on the responsibility of analyzing the cost of any contract proposal. This ensures an equal playing ground for both labor organizations and the agency as both will be given the ability to comment about the analysis.
- Public Disclosure of Offers and Counteroffers – COIN requires all offers and counteroffers be disclosed to the public within 24 hours.
- Elected Officials Disclose All Relevant Communications – Each member of the governing body of an agency will be required to disclose any and all verbal, written, or electronic communications they have had with an official representative of a recognized employee organization.
- Public Disclosure Prior to Final Contract Approval – COIN ordinances require, before the final proposed contract is placed on the Board agenda, the Memorandum of Understanding to be posted on the Agency’s website, usually 30 days or two Board meetings prior to board ratification. This allows the public to review contracts and perform independent financial scrutiny and provide public comment prior board ratification.
COIN ordinances that adopted most or all of these elements have been enacted by several California cities and counties over the past several years, including Costa Mesa, Beverly Hills, Rancho Palos Verdes, Orange County, Fullerton, Huntington Beach, and others.
The version adopted by Rancho Palos Verdes is a good example of a concise COIN ordinance. It makes optional, however, not mandatory, the provision to appoint an independent outside auditor to analyze the fiscal impact of labor agreements:
COIN ORDINANCE – SAMPLE LANGUAGE
CITY OF RANCHO PALOS VERDES ADMINISTRATIVE INSTRUCTION
SUBJECT: LABOR RELATIONS
This Policy shall apply when the City negotiates a Tentative Agreement, a Memorandum of Understanding, or an amendment to a Memorandum of Understanding with a recognized employee organization.
A. Negotiations Team. The City’s lead negotiator may not be a City employee. The City Manager may select the members of the negotiations team and present them to the City Council for consent.
B. Fiscal Analysis. The City’s Department of Finance shall prepare a fiscal impact analysis of a Tentative Agreement, a proposed Memorandum of Understanding, or a proposed amendment to a Memorandum of Understanding unless the City Council directs that a fiscal impact analysis shall not be obtained. If the City Council so directs, the fiscal impact analysis may be reviewed by an independent certified accountant who is not a public employee.
C. Publication of Accepted Meet & Confer Proposals. If a meet and confer proposal relating to a Tentative Agreement, Memorandum of Understanding, or an amendment to a Memorandum of Understanding is accepted by the party to which it is presented, the proposal and the fiscal impact analysis shall be posted on the City’s website.
D. Action on Tentative Agreement. The City Council may take action to accept or reject a Tentative Agreement only after the Tentative Agreement has been placed on the agenda at a minimum of two City Council meetings that are held at least two weeks apart. Government Code section 3505.1 requires a governing body to vote to accept or reject a tentative agreement within 30 days of the date it is first considered at a duly noticed public. If the implementation of this rule would result in the City Council failing to act on a Tentative Agreement within 30 days of the date the Tentative Agreement is first considered at a duly noticed public meeting, the City Council may waive this requirement or call the second meeting as a special meeting within the 30 days.
E. Agenda Posting. A Tentative Agreement shall not be placed on the City Council’s consent calendar.
DOES THE STATE LEGISLATURE’S “CRONEY” LAW DETER AGENCIES FROM IMPLEMENTING COIN?
In a word, no.
In 2015, California’s state legislature passed SB 331, the Civic Reporting Openness in Negotiations Efficiency Act, or CRONEY. This law requires city contracts worth more than $250,000 to have an independent auditor review their costs and issue a publicly made report and recommendation.
Remarkably, the CRONEY statute only applies to cities and counties that have enacted COIN ordinances. Insofar as it only applies to cities and counties with COIN ordinances, the intent of CRONE is clear. It is meant to deter cities and counties from allowing thorough public review of their labor negotiations, or being able to submit their proposed labor agreements to an economic impact analysis by an independent financial auditor.
In reality, however, CRONEY should not deter cities and counties from enacting COIN ordinances. While the requirements it imposes on outside contracting are somewhat onerous, most agencies, including the vast majority of California’s cities, do not have a significant number of contracts in excess of $250,000. This is especially the case because the CRONEY statute exempts public works contracts from the $250,000 threshold.
Transparency in government is a bipartisan goal. COIN ordinances add significant transparency to the most financially consequential process in local government, negotiations with public sector unions. In nearly all cases, the benefits of COIN still greatly outweigh the costs, even in the era of CRONEY.
Local elected officials who wish to bring more transparency to their agencies are invited to study the four full text examples of COIN ordinances in the references below. Also excellent reading, linked to immediately below, is the summary of Costa Mesa’s COIN ordinance, written in 2012 by the attorneys of Larsen, Willis & Woodard, LLP.
California’s state law “CRONEY”:
California Legislature – Civic Reporting Openness in Negotiations Efficiency Act (full text) – Legislative Info, October 9, 2015
City of Rancho Palos Verdes – Administrative Instruction No. 2-20, Labor Relations (full text), October 18, 2011
City of Costa Mesa – Civic Openness in Negotiations (full text), October, 2012
City of Fullerton – Transparency and Accountability in Labor Negotiations (full text), July 15, 2014
City of Huntington Beach – Ordinance No. 4078, Openness in Labor Negotiations (full text), December 7, 2015
City of Beverly Hills:
- Ordinance No. 13-O-2651 (original labor negotiations ordinance; adopted 12/17/2013
- Ordinance No. 15-O-2679 (amendment to labor negotiations; adopted 05/18/2015)
- Ordinance No. 15-O-2697 (urgency ordinance adding economic analysis; adopted 03/04/2014)
- Ordinance No. 16-O-2698 (regular ordinance adding economic analysis; adopted 01/05/2016)
Costa Mesa City Council Passes COIN, A Transparency Law Aimed To Shine A Light On City Negotiations With Public Employee Unions (excellent summary of Costa Mesa’s COIN ordinance) – Larsen, Willis & Woodard, LLP, October 16, 2012
The Need for Labor Negotiation Transparency – Report by 2014/2015 Marin County Grand Jury, June 4, 2015
New state law affects agencies, like Costa Mesa, using COIN negotiations rules – Los Angeles Times, October 14, 2015
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