RESPONSE TO THE MARIN COUNTY CIVIL GRAND JURY …

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STAFF REPORT

MEETING

DATE: September 15, 2015

TO: City Council

FROM: Cathy Capriola, Assistant City Manager

Dan Weakley, Human Resources Manager

PRESENTER: Dan Weakley, Human Resources Manager

SUBJECT: RESPONSE TO THE MARIN COUNTY CIVIL GRAND JURY

REGARDING CIVIC OPENNESS IN NEGOTIATIONS

REQUEST

Consider approving the City’s response to the Marin County Civil Grand Jury report titled “The

Need for Labor Negotiations Transparency”.

RECOMMENDATION

Approve the response.

DISCUSSION

On June 4 2015, the Marin County Civil Grand Jury released publically a report titled “The Need

for Labor Negotiations Transparency”. The report discusses a process known as Civic Openness

In Negotiations (COIN) and recommends that public agencies in Marin adopt ordinances

implementing COIN. COIN includes a number of elements that are intended to make the labor

negotiations process more transparent to the public. COIN ordinances have been adopted by a

handful of generally larger public agencies in southern California, including Orange County and

the cities of Costa Mesa, Beverly Hills, Fullerton and Rancho Palos Verdes.

COIN Elements

The elements of COIN include:

hiring an independent lead negotiator to represent the agency in labor negotiations;

hiring an independent auditor to assess the fiscal impact of each provision of the current

labor agreements and making the information available for public review;

publically disclose all proposals, including their fiscal impact, after they are accepted or

rejected by either party to the negotiations;

posting tentative agreements and associated costs for public review seven days prior to the

first of two consecutive meetings of the agency board. The tentative agreement is discussed

at the first meeting and can be adopted at the second meeting.

922 Machin Avenue Novato, CA 94945

(415) 899-8900 FAX (415) 899-8213

www.novato.org

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Background and Context

COIN must be considered within the context of two important and well-established California

laws: the Meyers-Milias-Brown Act and the Ralph M. Brown Act.

Meyers-Milias-Brown Act

The Meyers-Milias-Brown Act (MMBA), which is embodied in California Government Code

Section 3500 et seq., governs local government labor relations. The MMBA requires the public

agencies that are subject to its provisions to meet and confer in good faith on wages, hours and

other terms and conditions of employment with the representatives of a recognized employee

organization. If an agreement is reached on the matters being negotiated, the MMBA requires the

parties to jointly prepare a written memorandum of understanding (MOU) to memorialize the

agreement. The governing board of the agency must approve the MOU.

It is likely that certain elements of a COIN ordinance are subject to the meet and confer obligations

of the MMBA. This will be determined with certainty at some point by the California Public

Employment Relations Board.

Ralph M. Brown Act

The Ralph M. Brown Act (the “Brown Act”), which is codified as Government Code Section

54950 through 54963, is California’s open meeting law. The Brown Act establishes broad public

access to the meetings of legislative bodies. It recognizes, however, that under certain limited

circumstances there is a legitimate governmental interest in closing some discussions to the public.

Aspects of labor negotiations, such as meetings of the agency board to discuss strategies and

proposals that address wages, hours and working conditions and to give direction to the agency’s

negotiator(s), are allowed to occur in closed session. The public must be given advance notice of

the closed session in accordance with the Brown Act. This includes providing the reason for the

closed session. Prior to the start of the closed session, the public must be afforded the opportunity

to address the board on the matter being discussed.

The Brown Act was adopted (and has been amended many times) for the express purpose of

ensuring the public receives notice and has ample opportunity to comment on the business and

important decisions of the agency. Arguably, the general objective of COIN - transparency -

already exists within the requirements of the Brown Act.

General Comments and Concerns

The Grand Jury report contains three “Findings” and two “Recommendations” concerning labor

negotiations and COIN. The City is required to provide a response to the Grand Jury on each

Finding and Recommendation. The response was originally due 90 days after the Grand Jury

issued the report, but the City requested and was granted an extension to September 30 due to

summer schedules.

As detailed in the draft response, the City already utilizes a key aspect of COIN, which is the use

of an independent labor negotiator. There are significant concerns, however, with some of the

comments and conclusions made by the Grand Jury, including that the COIN process does not

slow down the negotiations process. Adding an independent audit of the fiscal impact of each and

every proposal, for example, will add time to the negotiations process depending on what is being

negotiated and the availability of the auditor to perform the work. If the issues are many and

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complex, which is often the case, audits of the type prescribed by COIN could add months of

delay.

Another consideration is the challenge of the Orange County COIN ordinance by several labor

unions. After adoption of a COIN ordinance by the Orange County Board of Supervisors, the

Orange County Employees Association (OCEA) and two other unions filed a complaint with the

California Public Employees Relations Board (PERB). PERB is a quasi-judicial administrative

agency charged with administering the various collective bargaining statues that cover almost all

public employees in California. The OCEA alleged the county adopted the ordinance without

providing notice to the union and an opportunity to meet and confer on the ordinance in violation

of the statute governing city, county and special district labor relations (the Meyers-Milias-Brown

Act or MMBA). The county responded that the contents of the ordinance did not fall within the

scope of representation and thus it did not have a duty to bargain with the union. In a proposed

decision released on June 16, 2015, the PERB Administrative Law Judge determined that some of

the provisions of the ordinance were mandatory subjects of bargaining and that the county had

violated the MMBA and PERB regulations. A final decision has not been rendered, yet.

Notwithstanding aspects of COIN that may be appropriate and reasonable, staff recommends that

the City take a “wait and see” approach before having further discussions with the Council and

labor about COIN. Given the unsettled circumstances in Orange County, it would be best to know

how PERB and perhaps the courts will ultimately interpret California public agencies’ obligations

before considering whether a COIN ordinance or elements of COIN will provide value in Novato.

Staff has reviewed responses from some of the other agencies and finds that Novato’s response is

consistent with those agencies. In particular, the agencies agree the Grand Jury’s

Recommendations require further analysis. Of note, Marin County has indicated it will implement

Recommendation 2.4, in part, after the County engages in good faith bargaining with its labor

unions. Under this recommendation, the agency must make public seven days before a board or

council meeting the negotiated tentative agreement and the fiscal analysis, which must be

independently verified.

FISCAL IMPACT

There is no fiscal impact.

ALTERNATIVES

None.

ATTACHMENTS

1. Draft response to the Marin County Civil Grand Jury report titled “The Need for Labor

Negotiations Transparency”

2. “The Need for Labor Negotiations Transparency”, Marin County Civil Grand Jury, June 4,

2015

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September 15, 2015 The Honorable Judge Fay D’Opal

Marin County Superior Court

P.O. Box 4988

San Rafael, CA 94913

SUBJECT: Response to Grand Jury Report, The Need for Labor Negotiation Transparency

Honorable Judge D’Opal:

This letter serves as the Novato City Council’s response to the Marin County Civil Grand

Jury’s report, The Need for Labor Negotiation Transparency, dated June 1, 2015.

The Novato City Council has always been fiscally prudent with regard to employee compensation. For example, the Council did not provide enhanced pension formulas in the early 2000s to its employees, when many other California public agencies did so. In addition, the City never offered retiree healthcare so we do not have the significant unfunded liabilities of many other jurisdictions. It’s also important to note that over the last six years, an extensive amount of information has been reported publicly regarding the costs and structure of compensation for Novato employees as part of the City’s Fiscal Sustainability process. As additional background for the City’s response, it may also be helpful to understand more about the City’s labor negotiations and employees. The City has 194 regular employees. There are six bargaining units that are represented by professional labor organizations and two units that are not formally represented by outside labor. This means 86% of the City’s employees are members of a formal labor organization. In Novato, all current labor contracts, except one, expire on June 30, 2016. Typically, Novato would be preparing for negotiations in November/December, meeting with Council in January/February and initiating negotiations in March. Lastly, it’s important to note that the impetus for adopting COIN ordinances for some of the southern California agencies noted in the Grand Jury’s report was adversarial labor relations. Those same conditions do not exist in Novato and other Marin agencies. For many years, Novato has used elements of “interested based negotiations” as a means to review issues and concerns. The labor-management atmosphere is respectful and professional. The City Council strives to reach the best agreement for tax payers while also providing reasonable compensation for our employees based on the work being performed in order to attract and retain a talented work force. The following are the City Council’s specific responses to the findings and

recommendations.

STATEMENT REGARDING FINDINGS

Finding 1: The residents of Marin County pay taxes to support decisions made by the Board

of Supervisors and City and Town Councils; however these residents have minimal

opportunity to provide input into labor negotiations.

Response: Partially Disagree.

The City Council agrees that residents pay taxes to pay for a variety of public programs and

services. The residents also elect officials to make decisions on their behalf concerning

those programs and services. Residents have the opportunity to communicate their

922 Machin Avenue Novato, CA 94945 415/899-8900 FAX 415/899-8213 www.novato.org Mayor Jeanne MacLeamy Mayor Pro Tem Pat Eklund Councilmembers Denise Athas Madeline Kellner Eric Lucan City Manager Michael S. Frank

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desires and perspectives on programs and services and financial matters directly to the

City Council in variety of ways.

The public also has an opportunity to comment before each closed session at which labor

negotiations will be discussed and in Novato, residents have historically participated in this

public comment opportunity. It should also be noted that the public can (and does) make

comments, observations and recommendations about employee compensation

throughout the year. In Novato, citizens have lobbied the Council for pension reform and

actively utilized the public comment process to make their concerns heard before, during

and after the negotiations process.

Finding 2: The COIN process can be implemented without affecting the manner in which

tentative agreements are negotiated but which nevertheless will ensure public awareness

of the terms and cost of those agreements in advance of their being adopted.

Response: Disagree.

While a properly constructed COIN ordinance may result in a higher level of public

awareness, implementing an ordinance as recommended will absolutely change the

manner in which labor agreements are negotiated. We are not making a value judgment

about COIN in this context, but it introduces into the negotiations process steps that add

time and cost and that frankly can become subjects of negotiations themselves. For

example, the fiscal impact analysis not only injects added time, but the auditor’s

determination itself could be disputed by either party to the negotiations.

The Grand Jury’s report provides a list of five agencies that have adopted a COIN

ordinance: Orange County and the cities of Costa Mesa, Beverly Hills, Fullerton and Rancho

Palos Verdes. These are generally much larger organizations than Novato with greater

resources. In addition, only one agency, the City of Costa Mesa, has executed a labor

agreement using COIN. We believe the COIN process is still too new and untested to use

as a basis for drawing the conclusion in the Grand Jury’s finding.

The City Council would like more information about the bargaining experience from other

public agencies under a COIN ordinance before committing to implementing into its

current negotiations process. The City Council has concerns that implementation of a COIN

ordinance could result in added costs to labor negotiations and delay the negotiations

process considerably.

Finding 3: The COIN process mandates transparency in government decision-making,

allowing residents to be informed and participate in public discussion of how their tax

dollars are spent.

Response: Partially Disagree.

The City Council believes the COIN process is well-intentioned and that certain concepts of

COIN have merit. However, some of the specific recommendations of the Grand Jury are

not practical and may be costly and create extensive time delays. The City Council believes

that there are opportunities for the public to participate and provide input and

recommendations concerning labor negotiations through the public comment process.

The public’s right to be informed and to participate in discussions about any matter before

the City Council, including labor negotiations, is guaranteed and protected by the City’s

rigorous adherence to the Brown Act.

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The negotiations process in Novato begins with City staff providing detailed presentations of the City’s budget, five-year forecast, cost of employee pensions and unfunded liabilities, to both the City Council and bargaining units. Consistent with the Brown Act, City staff provides extensive information to the City Council in closed sessions prior to the start of negotiations to provide background and to develop City’s interests. All closed sessions of the City Council are required to be noticed under the Brown Act so that the public knows when the topic will be on the agenda and can speak to their elected officials beforehand. Historically, members of the public have actively participated during public comment prior to Council deliberations to express their concerns and thoughts. Negotiations are a multi-faceted and complex process with parallel discussions occurring

with multiple bargaining units simultaneously. The Novato City Council has always taken

an active role in labor negotiations and regards tax-payers’ interests of paramount

importance as it considers proposals and their value and costs. While not present in closed

sessions, the public’s interests are well-represented by their elected officials.

Recommendation 1: Marin County Board of Supervisors and each City Council and Town

Council in Marin County adopt and implement a COIN ordinance prior to June 1, 2016, or

prior to the next round of negotiations, whichever comes first.

Response: This recommendation requires further analysis.

The Novato City Council believes that concepts within COIN could have value, but also

believes it would be premature to adopt an ordinance or implement it by other means

until the Orange County Employee Association complaint is resolved and there is a better

understanding of how COIN has worked for the other agencies that have adopted it. In the

meantime, Novato will continue to use an independent labor negotiator and will maintain

the rigorous process it has developed for ensuring the Council is kept up-to-date on all

aspects of labor negotiations and that it is making well-informed decisions.

The provisions of COIN, including the provision that mandates, “make public each

proposal, after it is accepted or rejected by either Party, and publically verify the costs of

that accepted or rejected proposal by an independent auditor” attempt to modify the

negotiating relationship between the parties and change the manner in which tentative

agreements are negotiated. Such a modification would likely need to be negotiated with

each labor union prior to implementation.

On June 16, 2015, an Administrative Law Judge from the Public Employment Relations

Board determined that implementing this provision of COIN was illegal without meeting

and conferring in good faith. “While the ground rules used during negotiations do not, on

their face, directly affect employees’ wages, hours, or working conditions, the application

of ground rules through the bargaining process would have a significant and adverse

effect on wages, hours and working conditions,” according to the ruling, written by Chief

Administrative Law Judge Shawn B. Cloughesy. “If a public agency is able to exercise

overall control over the ground rules of bargaining, it can short circuit and frustrate

bargaining to the point it ceases to be a bilateral process.”

Recommendation 2: Marin County Board of Supervisors and each City Council and Town

Council in Marin County in Marin County adopt and implement a COIN ordinance that

includes, but is not limited to the following:

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The City of Novato already utilizes one recommended element of COIN, which is the use of

an independent labor negotiator. Other elements have potential consequences that at

this point have not been fully analyzed and for which there is very limited practical

experience. For example, while requiring that a tentative agreement be placed on two

consecutive public meeting agendas seems reasonable, there may be circumstances where

this requirement conflicts with section 3505.1 of the Meyers-Milias-Brown Act, which

requires tentative agreements be accepted or rejected within 30 days of the date it is first

considered at a duly noticed public meeting. A variety of factors, such as meeting

frequency and meeting cancellations, could impact the ability to comply with this

requirement.

1. Hire an independent, experienced Lead Negotiator to negotiate all labor

agreements.

The City of Novato has retained an independent negotiator for its negotiation

process for almost 15 years and anticipates it will continue to do so in the future.

The independent negotiator meets with the City Council and staff in all closed

sessions. In addition the independent negotiator is the lead negotiator in four out

of the six bargaining units that have professional labor representatives.

2. Hire an independent auditor to determine the fiscal impact of each provision in the

current contract, and make this analysis available for public review.

Prior to beginning negotiations, City staff provide detailed presentations of the

City’s budget, five-year forecast, cost of employee pensions and unfunded

liabilities, to both the City Council and bargaining units. The City’s budget, labor

agreements and salary schedules are available on the City’s website, as are the

comprehensive annual financial audits (CAFR). The City’s Fiscal Sustainability Plan

has extensive cost and both salary plus benefit information outlined. The City’s

annual adopted budget contains a summary breakdown showing the

compensation components of each work unit within the City (see page 71 of the

adopted FY 14/15 budget; the adopted FY 15/16 budget will have a similar page

and will be released at the end of September).

The City does not believe that the hiring of an “independent auditor” to determine

the fiscal impact for each provision in each contract is necessary. The City’s

Finance Division is an active participant in the labor negotiations process and

provides timely and accurate information to the City Council, the independent

labor negotiator and Human Resources staff. The City Council believes this

provisions would create an added cost to labor negotiations and delay the process

considerably.

It’s also important to note that the City utilizes the services of an independent

actuary to review its pension plans and OPEB liabilities, and if a pension

enhancement is contemplated, the same actuary prepares an analysis. All of this

information is made public. There is also detailed documentation and analysis of

the City’s financial records, including benefit costs and liabilities, required by the

Governmental Accounting Standards Board (GASB).

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3. Make public each proposal after it is accepted or rejected by either Party, and

publically verify costs of that accepted or rejected proposal by an independent

auditor.

The bargaining process, which is governed by the Meyers Milias Brown Act, is

complex as it involves many topics, proposals and counter proposals made by each

party. Auditing every single proposal, with no distinction for whether or not the

proposal was agreed to, is not fiscally prudent, particularly since many of the

proposals go through an iterative development process before being included in

the final tentative agreement or they can ultimately be abandoned.

There are various approaches to labor negotiations, including the one inferred in

this recommendation, which is to consider each proposal independently and

tentatively agree or reject each and every proposal over the course of

negotiations. Novato and its labor groups, like many agencies and their unions,

use a different approach in which tentative agreement is reached on a

comprehensive package of proposals. As such, this recommendation may not by

practical in Novato given our current approach to bargaining.

4. Make public seven days prior to a Council meeting the negotiated tentative

agreement and the fiscal analysis thereof, which are to be independently verified.

While on the surface this recommendation seems to make sense and the City

supports additional time for public review, we believe it needs to be considered in

conjunction with the following recommendation and an agency’s ability to comply

with the time frame mandated in MMBA Section 3505.1.

5. After seven days, place the final tentative agreement on the following two

consecutive Employer’s public meeting agenda: the first meeting is for discussion of

the tentative agreement; the second meeting is for a vote by the Employer to

approve or disapprove the tentative agreement.

While on the surface this recommendation seems to make sense and the City

supports additional time for public review, we believe it needs to be considered in

conjunction with the following recommendation and an agency’s ability to comply

with the time frame mandated in MMBA Section 3505.1.

The City applauds the Grand Jury for its interest and commitment to public sector

transparency and appreciates the opportunity to respond to the report.

Sincerely,

Jeanne MacLeamy

Mayor

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2014/2015 MARIN COUNTY CIVIL GRAND JURY

The Need for Labor Negotiation Transparency

Report Date: June 1, 2015 Public Release Date: June 4, 2015

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The Need for Labor Negotiation Transparency

SUMMARY

During the 2014-2015 Marin County Grand Jury investigation leading to its 2015 report, Pension Enhancements: A Case of Government Code Violations and A Lack of Transparency, the Grand Jury learned that negotiations between Marin County, and the cities and towns therein, and their respective unions (hereafter collectively referred to as the “Parties”) are conducted in private, without transparency, and removed from the scrutiny of the Marin community. Although Marin County residents pay taxes to support decisions made by the Marin County Board of Supervisors (BOS) and the City and Town Councils, (hereafter collectively referred to as “Employer(s)”), there are numerous times when no transparency into the background of those decisions is made to the public. The Grand Jury learned that the public is notified of a negotiated tentative labor agreement only when the agenda, which schedules consideration of the agreement, is posted—some three to four days prior to the Employers' public meetings. This is also the meeting at which the Employers vote to approve or disapprove the agreement. Prior to the agenda posting, little or no detailed information is made public about the terms of the tentative agreement or what it will cost. Without this information, there is no full public disclosure of the terms and cost of an agreement during the negotiation process and prior to its being voted upon. With no transparency, the public is excluded from input until it is too late for a reasoned public dialogue. During its investigation, the Grand Jury also learned that various California cities and Orange County adopted a formal negotiation process, Civic Openness In Negotiations (COIN), which allows for community review of not only what is being negotiated, but also what a tentative agreement will cost to implement. One key element of the COIN process is the stipulation that the Employer hire an experienced, independent Lead Negotiator for all negotiations. This requirement precludes any city or county employee from negotiating terms that may benefit that employee, thus avoiding any conflict of interest. The common elements of the COIN process are as follows:

1. The Employer hire an experienced, independent Lead Negotiator for all negotiation of wages, hours, and terms and conditions of employment.

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The Need For Labor Negotiation Transparency

2. The Employer hire an independent auditor to assess the fiscal impacts of each

provision in the current labor contract. This fiscal impact is made available for public study.

3. After each proposal is accepted or rejected by either of the Parties, it is publicly disclosed (generally on the Employer’s website). The costs for the implementation of the proposal are verified by an independent auditor and also publicly disclosed.

4. Seven days prior to the Employer’s public meeting, the final tentative agreement is made public (generally on the Employer’s website), including all associated costs, which are independently verified.

5. After seven days, the final tentative agreement is placed on two consecutive Employer’s public meeting agendas: at the first meeting, the agreement is a discussion item; at the second meeting, the Employer votes on the agreement.

The Grand Jury recommends that the Employers adopt an ordinance implementing the COIN process to ensure transparency and prior public review of all proposals and final tentative labor agreements.

BACKGROUND

During the 2014-2015 Marin County Grand Jury investigation leading to the 2015 Grand Jury report, Pension Enhancements: A Case of Government Code Violations and A Lack of Transparency, the Grand Jury learned that labor negotiations in Marin County and the cities and towns therein are conducted without transparency, and are thereby removed from the scrutiny of the community. During this time, the Grand Jury also learned that various California cities and Orange County had adopted a transparent negotiation process, Civic Openness in Negotiations (COIN), which allows for community review of tentative proposals being negotiated and also what those proposals will cost if accepted or rejected. As a result, the Grand Jury decided to investigate whether a more transparent negotiation process might be appropriate for Marin County and its cities and towns. APPROACH

The Grand Jury interviewed representatives of the Orange County Management of Government Affairs, various Marin County officials directly involved with labor contract negotiations, and officials from Costa Mesa who are engaged in the implementation of COIN. Orange County and Costa Mesa COIN ordinances were reviewed along with numerous websites of various cities and counties involved in the use of COIN. Additionally, Grand Jury members attended multiple Marin County Board of Supervisors meetings at which the public brought COIN to the attention of the Board of Supervisors. Grand Jury members also attended the April 28, 2015, BOS meeting where COIN was agendized for discussion; they later viewed the video of the meeting and read the staff report relating to COIN as presented at that meeting.

June 1, 2015 Marin County Civil Grand Jury Page 2 of 10

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DISCUSSION The Need for Civic Openness in Labor Contract Negotiations (COIN) Although Marin County residents pay taxes to fund decisions made by the Marin County Board of Supervisors and the City and Town Councils, often there is no transparency into the background of those decisions. One specific area that lacks transparency is labor negotiations between the Parties. In general, the public is notified of the Parties’ tentative agreements only three to four days prior to the Employers’ public vote; it is only then that the meeting agenda is posted for public view. Prior to the agenda posting, little or no detailed information is made public about the terms of the tentative agreement or what it will cost. In sum, there is no transparency before the vote on the tentative agreement. This short time period (three to four days) gives the residents of Marin little time to review the tentative agreement in order to provide input at an Employers’ public meeting—the meeting at which the tentative agreement is presented for approval. Furthermore, the public receives no information regarding any proposal made by either Party or the associated costs of those proposals, which leads to the question: What should be disclosed to the residents of Marin and when?

COIN Started In Costa Mesa

The Grand Jury learned that a newly elected Costa Mesa City Council had discovered the financial strain placed on their city by their unfunded pension liabilities. This discovery, coupled with the realization that opaque labor negotiations had created an environment devoid of public oversight, review or input, motivated the Council to adopt a more transparent process for all labor negotiations. Accordingly, the City of Costa Mesa adopted a COIN ordinance in September of 2012, the first municipality in California to do so.

Subsequently, Beverly Hills, Fullerton and Rancho Palos Verdes also adopted variations of COIN, as did Orange County (Appendix A)1. For all these entities, the principal objective of the COIN process is to allow the public to review and to provide input during negotiations. One person interviewed stated, “...it occurred to the Council that the public’s full understanding of what they are being asked to pay for is good governance.”

Learning this, the Grand Jury investigated various existing COIN ordinances and procedures to determine what the COIN process might mean for Marin Country and its cities and towns.

1 Orange County Employee Association has made an unfair practice charge to the Public Employment Relations Board concerning how COIN was adopted, not the implementation of COIN. This is not yet resolved.


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What COIN Is: Key Components

The common elements of the COIN process are as follows:

1. The Employer hire an experienced, independent Lead Negotiator for all negotiation on wages, hours, and terms and conditions of employment. This requirement precludes having a city or county employee negotiate terms of an agreement that could directly benefit such employee.

2. The Employer hire an independent auditor to assess the fiscal impacts of each provision in the current labor contact. This fiscal impact is made available for public study.

3. Labor contract negotiations begin.

4. After each proposal is accepted or rejected by either Party to the negotiation, the proposal is publicly disclosed (generally on the Employer’s website). The long-term and short-term costs of the proposal are verified by an independent auditor and also publicly disclosed.

5. Negotiations conclude with a final tentative agreement.

6. Seven days prior to the Employer’s public meeting, the final tentative agreement is made public (generally on the Employers’ website), including all associated costs that are independently verified.

7. Following these seven days, the final tentative agreement is placed on the following two consecutive Employer’s public meeting agendas: at the first meeting, the tentative agreement is a discussion item; at the second meeting, the Employer(s) vote on the tentative agreement.

The above process is used in a number of municipalities. For more details see Appendix A.

What COIN Is Not: Misconceptions

The Grand Jury learned that there are many misconceptions about the COIN process, as follows:

Misconception #1: The public negotiates.

COIN does NOT involve the public in actual negotiations, nor does it disclose what occurs at the negotiation table. Fair-minded taxpayers recognize that such an attempt would lead to an unproductive bargaining environment at best and would likely evolve into intractable positions by both sides that would prevent a constructive outcome.


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Misconception #2: Negotiations are held open for public observation.

In none of the cities or Orange County are COIN negotiations open for public view or public participation. Negotiations occur in private, but the decisions on proposals are made available for public review.

Misconception #3: COIN slows down the negotiation process.

The Grand Jury has learned that, during the first round of negotiations using the COIN process, there is a learning curve, since COIN provides a new framework within which to operate. However, after learning the new process, those interviewed noted that negotiations proceeded in a timeframe similar to prior negotiations.

Misconception #4: Not all types of negotiation methods can adapt to the COIN processes.

The COIN process is about transparency and not about the negotiation method. Commonly used negotiation practices, such as interest-based or adversarial, can still be the norm while using the COIN process.

The COIN process is about the transparency of decisions made during negotiations that lead to a tentative agreement – the agreement that is recommended to the Employer for approval. It is through the COIN process that the public is made aware of the terms and associated costs of tentative agreements well before they are adopted, thereby giving taxpayers opportunity to provide timely public review and input.

FINDINGS

F1. The residents of Marin County pay taxes to support decisions made by the Board of Supervisors and City and Town Councils; however these residents have minimal opportunity to provide input into labor negotiations.

F2. The COIN process can be implemented without affecting the manner in which tentative agreements are negotiated but which nevertheless will ensure public awareness of the terms and cost of those agreements in advance of their being adopted.

F3. The COIN process mandates transparency in government decision-making, allowing residents to be informed and to participate in public discussion of how their tax dollars are spent.

RECOMMENDATIONS

R1. Marin County Board of Supervisors and each City Council and Town Council in Marin County adopt and implement a COIN ordinance prior to June 1, 2016, or prior to the next round of negotiations, whichever comes earlier.


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R2. Marin County Board of Supervisors and each City Council and Town Council in

Marin County adopt and implement a COIN ordinance which includes, but is not limited to the following:

1. Hire an independent, experienced Lead Negotiator to negotiate all labor agreements.

2. Hire an independent auditor to determine the fiscal impact of each provision in the current contact, and make this analysis available for public review.

3. Make public each proposal, after it is accepted or rejected by either Party, and publicly verify the costs of that accepted or rejected proposal by an independent auditor.

4. Make public seven days prior to a Board or Council meeting the negotiated tentative agreement and the fiscal analysis thereof, which are to be independently verified.

5. After seven days, place the final tentative agreement on the following two consecutive Employer’s public meeting agendas: the first meeting is for discussion of the tentative agreement; the second meeting is for a vote by the Employer to approve or disapprove the tentative agreement.

REQUEST FOR RESPONSES

Pursuant to Penal Code section 933.05, the Grand Jury requests responses as follows:

From the following governing bodies:

Marin County Board of Supervisors: All Findings and Recommendations.

City Council of Belvedere: All Findings and Recommendations.

Town Council of Corte Madera: All Findings and Recommendations.

Town Council of Fairfax: All Findings and Recommendations.

City Council of Larkspur: All Findings and Recommendations.

City Council of Mill Valley: All Findings and Recommendations.

City Council of Novato: All Findings and Recommendations.

Town Council of Ross: All Findings and Recommendations.

Town Council of San Anselmo: All Findings and Recommendations.

City Council of San Rafael: All Findings and Recommendations.

City Council of Sausalito: All Findings and Recommendations.

Town Council of Tiburon: All Findings and Recommendations.


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The governing bodies indicated above should be aware that the comment or response of the governing body must be conducted subject to the notice, agenda and open meeting requirements of the Ralph M. Brown Act.


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APPENDIX A

Summary of “COIN” Requirements Adopted by City/ County

Requirement Costa Mesa

Beverly Hills

Fullerton Rancho Palos Verdes

Orange County

Applies to all negotiations between the Parties.

Yes

Yes Must include Salary

Changes

Yes Yes

Independent Negotiator

Yes Yes May be Waived by

Council

Yes Yes

Executive Employee Involved in Bargaining

Yes Yes Yes Yes Yes

Pre-Negotiation Economic Analysis (Baseline)

Yes Yes Yes Yes Yes

Each Accepted or Rejected Proposal plus the Economic Analysis made public

Yes Yes Yes Yes Yes

Proposals Verified Independently

Yes Yes Yes May be Waived by

Council

Yes

Tentative Agreement an Agenda Item on 2 Meetings Prior to Adoption

Yes Yes Yes Meetings must be 2

Weeks Apart

Yes


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APPENDIX B THE COIN PROCESS

BIBLIOGRAPHY

"02 Transparency and Accountability in Labor Negotiations - Laserfiche WebLink." - Laserfiche WebLink. Accessed April 27, 2015. http://docs.cityoffullerton.com/weblink8/2/doc/544710/Page1.aspx.

"Beverly Hills Ordinance 13-O-2657." December 18, 2013. Accessed April 15, 2015. http://www.beverlyhills.org/cbhfiles/storage/files/851941061213138018/13-O-2651.pdf.

The Employer hires an experienced, independent, Lead Negotiator for all

negotiation on wages, hours, and terms and conditions of employment.

At the second Employers’ public

meeting a vote is taken by the Employer.

The long-term and short-term

associated costs of the proposal are verified by an independent auditor and

also publically disclosed.

Seven days prior to the Employers’ public meeting, the final tentative

agreement is made public (generally on the Employers’ website), including

all associated costs, which are independently verified.

After seven days, the final tentative

agreement is placed on the following two consecutive Employers public meeting agendas: meeting one is a

discussion item;

The Employer hires an independent auditor to assess the fiscal impacts of each provision in the current contact.

This fiscal impact is available for pubic study.

After each proposal is accepted or

rejected by either Party it is publically disclosed (generally on the Employers’

website).


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Brouillette, Mathew. "At Last Scrutiny for Public Union Deals." Wall Street Journal

(New York), May 21, 2015, Opinion sec. A growing movement is opening labor negotiations so taxpayers can see how their money is being spent.

City Council of Costa Mesa. City Council. COIN ORDINANCE - Ordinance No. 12-7. Accessed April 13, 2015. http://www.costamesaca.gov/ftp/chartercommittee/agenda/2014/2014-01-22/coin.pdf.

Johnson, Nels "Open Labor Talks Spurs County Review." Marin Independent Journal (San Rafael), April 30, 2015. Accessed April 30, 2015. http://www.marinij.com/general-news/20150430/open-labor-talks-plan-pits-pension-critics-unions.

"Minutes, Rancho Palos Verdes City Council." May 7, 2014. Accessed April 30, 2015. http://www.palosverdes.com/rpv/citycouncil/minutes/2014_Minutes/city_council/20140506_CC_MINS.pdf.

Nicholson, Angela. Discuss the Civic Openness (COIN) Ordinance Enacted in Costa Mesa. CA. Report. Marin Board of Supervisors Meeting, April 28, 2015.

Orange County Board of Supervisors. Ordinance No 14-005. 3rd ed. Vol. 1. Series 21. Orange County: Board of Supervisors, 2014. http://cams.ocgov.com/Web_Publisher/Agenda07_15_2014_files/images/O00514-000844A.PDF.

"Search or Watch a Meeting." – Marin County Board of Supervisors Public Comment. March 03, 2015. Accessed May 22, 2015. http://www.marincounty.org/depts/bs/meeting-archive.

"Search or Watch a Meeting." Marin County Board of Supervisors, April 28, 2015. Electronically Published April 29, 2015. Accessed May 20, 2015. Http://www.marincounty.org/depts/bs/meeting-archive.


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Documents

RESPONSE TO THE MARIN COUNTY CIVIL GRAND JURY …