Costa Mesa City Council Passes COIN, A Transparency Law Aimed To Shine A Light On City Negotiations With Public Employee Unions

In September 2012, the Costa Mesa City council unanimously passed the Civic Openness in Meetings ordinance, or COIN for short.  Council member Steve Mensinger, COIN’s proponent, touts it as a transparency ordinance for labor negotiations that will bring negotiations with public employee unions that usually take place behind closed doors into the public light, and will allow resident taxpayers the time to understand what they ultimately are held responsible for.  COIN also will give council members and staff tools to understand the long-term impacts of their decisions before the council approves the agreements.

Under COIN, the City Council will be required to:

  • Hire an independent negotiator to represent the city;
  • Have an independent auditor determine the fiscal impacts of each benefit listed in the employee association’s current contract and publish a report of that analysis at least 30 days before negotiations begin for a new contract;
  • Produce a public report that details the fiscal impacts of each proposal for new contracts compared to the current contract;
  • Have council members acknowledge in writing during each round of negotiations that they read and considered the report detailing the fiscal impacts of each offer;
  • Publicly report from closed sessions any portion of the negotiations—along with their fiscal impacts—that are no longer being considered;
  • Allow the public to review and comment on proposed employee contracts during at least two City Council meetings prior to a vote; and
  • Place the proposed employee contracts and any related materials on the City’s website at least seven days before the first council meeting where the proposed contracts will be on the agenda.

Mensinger said that previous negotiations for the City were done by staff members who were part of the very union they were at the negotiation table with, and they stood to personally benefit from the contracts they were negotiating.  This created a potential conflict of interest that also brought into question the impartiality of the City’s negotiators.  Mensinger gave the example of contract negotiations in 2008 where the City’s negotiator agreed to a retroactive 25% increase in the employee retirement benefits.  One year later, 65 employees retired without making any substantive contribution to what they were about to receive.  As a result, the unfunded liability for these retired workers will be funded by the taxpayers without the residents understanding how this occurred.

To address this apparent conflict, Mensinger proposed COIN which now will require the City to hire an independent negotiator for all future contract negotiations with unions.  In addition, Mensinger wanted to shine a light on the details of contracts that previously had been negotiated in closed session, out of the public eye.  He was interested in ensuring that all costs, including future costs, were part of the public report.  Mensinger says that, under COIN, residents will be able to weigh the short-term costs and benefits with the long-term costs and benefits, particularly as they apply to unfunded liabilities, which essentially are costs for future public employee benefits that are not covered by City revenues.

Mensinger also stressed the need to slow down the union contracting process.  Previously, union contracts came before the council on short public notice, with few details, and with little chance for public input.  COIN will provide a “cooling off period” as Mensinger calls it, that will provide in-depth financial analysis on the current public employee contract 30 days before negotiations on any new contract begins.  COIN also will require a report detailing the fiscal impacts of the new proposed contract compared to the previous contract.  And COIN will allow the public at least two City Council meetings to comment on the proposed contract before it can come up for a vote.  Mensinger believes that this added transparency will allow the residents a full opportunity to understand what is actually in the union contracts, which take up approximately 75% of the City’s budget.

The union took the position that it supported transparency, but said that COIN “increases costs for taxpayers and adds a cumbersome bureaucracy to the negotiations process — all in an effort to create a one-sided venue for the council to frame political attacks on Costa Mesa employees.  This ordinance clearly was not written in the spirit of respect and collaboration that has led past city councils and employee groups to forge meaningful reforms.  The backer of this ordinance has only one goal in mind: political opportunism.”

The impact of COIN already has been felt both in California and beyond.  Mensinger said that Beverly Hills currently is working on an ordinance similar to COIN.  He also has heard from the cities of Huntington Beach and Fullerton, as well as from cities in Nevada, Arizona, and Colorado who are interested in incorporating COIN into their contract negotiations with public employee unions.

The debate over public employee compensation and benefits is not going away any time soon, and there are ardent supporters on both sides.  However, transparency regarding the use of taxpayer dollars is nearly universally seen as a positive.  COIN advances that goal in ways not seen at the local level before, and it appears that the idea has been embraced by local agencies both in California and in other states.

If you have any questions regarding public union/public agency relations, please contact Greg Woodard at (949)-769-6602.

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