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Pension Reform in the Wake of the City of Bell Scandal

In response to the City of Bell scandal regarding officer and employee compensation, the California Legislature is considering the adoption of six bills. These proposed laws are designed to limit perceived abuses. A brief summary of each is set forth on the following page.

While none may pass, their terms provide an insight into what future “pension reform” may look like.

These bills are not law, but have the potential to become law. Please contact our office with any questions.

A.  AB 827 (Unrepresented Employee Contract Restrictions)

  1. An evergreen provision;
  2. Severance payments greater than twelve months in salary;
  3. Automatic compensation increases; or
  4. Automatic raises that exceed the Cost of Living.

If passed, this bill would prohibit any employment contract for an unrepresented
employee of a local agency from including:

B. AB 192 (Increase in City Contributions to Pension Payments)

If passed, this bill would require Cities to pay for any higher pension payments that stem from their luring a municipal employee away from another city by offering exorbitant pay.

C. AB 194 (Compensation Cap for Pension Benefit Calculation)

If passed, this bill would establish a cap on the total compensation that can be used to calculate a pension benefit.

D. AB 1955 (Charter City Council Member Salaries)

If passed, this bill would require Charter Cities to be penalized by the state if they pay city council salaries higher than allowed in General Law Cities. Council members would incur a 50% personal income tax on any “excess” amounts and the city’s redevelopment agency would be restricted from approving new plans or issuing new debt.

E. AB 2064 (Online Legislative Salary Disclosure)

If passed, this bill would require the Legislature to post on its website the salaries of its elected members and employees. The bill also requires cities, counties, special districts, school districts, and joint powers agencies to post the salaries of its elected officials and key employees.

F. SB 501 (Annual Compensation Disclosure)

If passed, this bill would require officials of cities, counties, special districts, school districts, and joint powers agencies to file an annual statement that discloses their compensation to the public.

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