ORANGE COUNTY, CA – Orange County supervisors on Tuesday approved a new ordinance they say will increase public scrutiny of labor deals, amid fierce criticism from union leaders that the measure unfairly singles out employees and ignores billions of dollars in private-sector contracts.
The unanimous 5-0 decision sets up a major confrontation between labor and county leaders that’s expected to play out in court.
The ordinance, known as Civic Openness in Negotiations or COIN, was brought forward by Supervisor John Moorlach, who argued that it will give residents a better chance to weigh in on proposed labor agreements.
“It’s been kind of frustrating that there was a long history of negotiations being done in closed session” and then approved immediately, Moorlach said at Tuesday’s supervisors meeting. “There was just hardly any constituent or voter input.”
“I think this would be good for government. I think it would be good for the bargaining process” as well as expedite it, he added.
Labor leaders, meanwhile, criticized supervisors for not having the ordinance cover all government contracting, including with private companies that finance the supervisors’ political campaigns.
“You’ve spent all this time talking about the money that county employees take out the front door. Meanwhile there have been billions – and the grand jury just identified it – going out the back door,” said Nick Berardino, general manager for the Orange County Employees Association.
“It’s being carried out by lobbyists and your campaign contributors.”
According to last week’s grand jury report, most of the county’s budget, or $3.1 billion out of $5.4 billion, is spent on private sector contracts.
The union also announced that it has assembled a team of 14 interns to track campaign contributions and votes by supervisors.
Every local union that represents county employees filed a complaint about the ordinance by the end of the day, Berardino said after the decision. According to the labor groups, the ordinance triggers a requirement to meet and confer with employees under the state’s Meyers-Milias-Brown Act.
Berardino also said the ordinance would likely be challenged through the legal system.
“We will go to the Public Employment Relations Board and continue with every legal remedy that’s available,” said Berardino, referring to a state agency that recently ruled against the county in a labor dispute.
Among other provisions, the COIN ordinance requires public disclosure of formal offers and counter-offers for labor contracts, a more detailed financial analysis of proposed agreements and the posting of proposed agreements 30 days in advance of voting on their approval.
Moorlach took issue with calls for all large contracts to be opened up under COIN, saying there’s “a world of difference” between labor negotiations and talks about other contracts.
“The processes are completely different and the dollar amounts are dramatically different,” said Moorlach. “So I’m having trouble appreciating that argument.”
Chairman Shawn Nelson, meanwhile, said the ordinance has nothing to do with campaign contributions.
“This is purely to make sure that deals are not truly done until the public” is brought in, Nelson said.
The ordinance originally required supervisors to disclose outside conversations they or their staff have had with labor representatives.
But after concerns from Supervisor Pat Bates, her colleagues ended up stripping that from the ordinance.
“In terms of the disclosure, I feel it…unfairly targets just the labor organizations and their representatives,” said Bates.
“If it’s to be an open process, then we shouldn’t just [disclose] the communications with labor negotiators or the union representatives…and not disclose that we also talked to so-and-so of such-and-such organization.”
At one point during the discussion, supervisors joked about possible penalties for violating the ordinance, which provoked a reaction from Berardino.
“It’s not that funny,” he shouted from the audience, before walking up to the podium.
Spitzer said he was out of order.
“Why don’t you give us a chance? You cut us off at 3 minutes,” Berardino replied. “I’ve seen a lot of other people get a lot more time…but we get cut off.”
“Why you don’t you want information for the public on the IT contract? You didn’t want to put that out there. You don’t want that because it’s all diversion,” said Berardino, referring to a Xerox contract where the firm raised its price by $11 million after being chosen as the winning bidder.
In response, Spitzer said he took the time to accommodate the union’s concerns this week about a campaign signature ordinance he put forward.
“I haven’t taken a dime from the union. But it doesn’t mean I didn’t want to know what their interest was,” said Spitzer.
Spitzer added that he “led the charge” to fire inmate monitoring firm Sentinel Offender Services, which a county auditor said committed “gross negligence,” despite taking several campaign donations from the firm.
“What is unequivocally clear is that we continue to do our jobs,” said Spitzer.
The debate comes against a backdrop of significant pressure on public pension plans, with the county’s unfunded liability rising from just over $1 billion in 2004 to more than $5 billion today.
Over the last decade, a combination of benefit increases, market losses and changes in actuarial assumptions have all contributed to the skyrocketing of unfunded liabilities.
Singling out the benefit increases, a representative of the Lincoln Club of Orange County “strongly” encouraged supervisors to pass the COIN ordinance on Tuesday.
Labor leaders, meanwhile, have emphasized that county workers have already taken major steps to address the pension issue. Most county workers, led by those represented by OCEA, now pay the maximum amount into their pensions allowed by law.
OCEA also worked closely with supervisors to develop a process for current employees to opt in to a lower benefit tier. The so-called “hybrid plan” has so far been stalled at the federal level.
As for legal challenges to COIN, supervisors and labor groups are at odds over whether the meet-and-confer process was required.
In a recent memo, Moorlach claimed the ordinance doesn’t have to be bargained because it “does not impact the wages, hours, or terms and conditions of employment for County employees and does not impact the negotiation of ground rules for current or future labor negotiations.”
That drew a rebuke from union leaders, with OCEA demanding in a June 13 letter that county officials meet-and-confer on the issue.
County supervisors didn’t address those legal questions at Tuesday’s meeting.
The Association of Orange County Deputy Sheriffs also argues that the county must negotiate the ordinance with employees.
“Although we feel that the proposed COIN ordinance is unconstitutional, as written, and its proposed language and timing constitute an unfair labor practice, we feel it necessary to go through proper channels before you illegally attempt to adopt and implement it,” wrote the deputy sheriff’s union president, Tom Dominguez, in a letter to Nelson on Tuesday.
In recent years, county supervisors and the City of Costa Mesa have lost high-profile lawsuits involving benefit and workplace challenges, costing taxpayers millions.
In 2011, the California Supreme Court threw out a county lawsuit seeking to overturn the 3-percent-at-50 pension formula for deputy sheriffs, after more than five years of legal battles in lower courts where the county consistently lost but appealed.
In May, an administrative law judge ruled that the county improperly imposed terms on more than 500 attorneys employed by the county.
And in Costa Mesa, which was the first jurisdiction in Orange County to adopt COIN, labor officials have tied up the city’s outsourcing efforts in court for years.
Costa Mesa has spent more than $1 million in legal fees so far in the case, with a judge on Tuesday rejecting the city’s request to throw out the suit.
Orange County’s COIN ordinance comes back for a second, and final, approval by supervisors on July 15.