Senate Bill 241 gives local governments and Joint Power Authority (JPA) member agencies greater input in bargained contracts before they go into effect.
In 2017, the pensions of East San Gabriel Valley Human Services Consortium (L.A. Works) employees were reduced by about 63% because the agency hadn’t made payments on their retirement benefits in over a year due to increasing contribution demands from the state. The four member cities of the JPA, West Covina, Azusa, Glendora, and Covina, also refused to pay as they were not legally liable for the agency’s debts. While they were correct in this assertion, contracted pensions were not protected.
Contract cities are often held to service rates set by entities providing municipal services, thereby driving up costs for cities left with no alternatives.
To remedy said unprotected pensions, AB 1912 (Rodriguez) was chaptered in 2018 to require JPA member agencies to apportion retirement liability amongst themselves prior to dissolution of the JPA.
- CalPERS Forced to Declare Southern California Agency in Default of Pension Obligations, CalPERS, 3/15/17
- CalPERS cuts LA Works pensions: Who's at fault?, Calpensions, 3/16/17
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