PRINTER'S NO. 2009
No. 1644 Session of 1999
INTRODUCED BY DERMODY, BELFANTI, FRANKEL, ROBINSON, MARKOSEK,
M. COHEN, MELIO, LAUGHLIN, HALUSKA, STABACK, PESCI,
WOJNAROSKI, HARHAI, COSTA, DeLUCA, WALKO, SAINATO, STEELMAN,
LEVDANSKY, YOUNGBLOOD, SURRA, RAMOS, CURRY, MICHLOVIC AND
STETLER, JUNE 14, 1999
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, JUNE 14, 1999
AN ACT
1 Providing for privatization contracts with political subdivision
2 agencies; and establishing privatization review boards in all
3 political subdivisions and providing for their powers and
4 duties.
5 TABLE OF CONTENTS
6 Section 1. Short title.
7 Section 2. Definitions.
8 Section 3. Validity of contracts.
9 Section 4. Contracts generally.
10 Section 5. Wages.
11 Section 6. Health insurance.
12 Section 7. Enforcement.
13 Section 8. Employment.
14 Section 9. Cost estimates.
15 Section 10. Employee organization.
16 Section 11. Award of contract.
17 Section 12. Certification of certain matters.
1 Section 13. Privatization Review Board.
2 Section 14. Construction.
3 Section 15. Regulations.
4 Section 16. Applicability.
5 Section 17. Effective date.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Short title.
9 This act shall be known and may be cited as the Political
10 Subdivision Privatization Review Board Act.
11 Section 2. Definitions.
12 As used in this act the following words and phrases shall
13 have, unless the context clearly indicates otherwise, the
14 meaning given to them in this section:
15 "Agency." An office, department, division, board, commission
16 or other office of the political subdivision.
17 "Dependent." The spouse and children of an employee, if such
18 persons would qualify for dependent status under the Internal
19 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.)
20 or for whom a support order has been or could be granted under
21 the laws of this Commonwealth.
22 "Political subdivision." Cities of the first class, second
23 class, second class A and third class and all counties of every
24 class or a home rule municipality which is or was a first class
25 city, second class city, second class A city, third class city
26 or a home rule county.
27 "Privatization contract." An agreement or combination or
28 series of agreements by which a nongovernmental person or entity
29 agrees with an agency to provide services, valued at $50,000 or
30 more for all counties and for cities of the first and second
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1 class and at $25,000 or more for all other political
2 subdivisions, which are substantially similar to or in lieu of,
3 services theretofore provided, in whole or in part, by regular
4 employees of the agency. Any subsequent agreement, including any
5 agreement from a rebidding of previously privatized service, or
6 any agreement renewing or extending a privatization contract,
7 shall not be considered a privatization contract. An agreement
8 solely to provide legal, management, consulting, planning,
9 engineering or design services shall not be considered a
10 privatization contract.
11 "Reviewing officer." The controller of the political
12 subdivision.
13 Section 3. Validity of contracts.
14 No agency shall make any privatization contract and no
15 privatization contract shall be valid unless the agency complies
16 with this act.
17 Section 4. Contracts generally.
18 An agency shall prepare a specific written statement of the
19 services proposed to be the subject of the privatization
20 contract, including the specific quantity and standard of
21 quality of the subject services. The agency shall solicit
22 competitive sealed bids for a privatization contract based upon
23 this statement. The day designated by the agency upon which it
24 will accept these sealed bids shall be the same for all parties.
25 This statement shall be a public record, shall be filed in the
26 agency and in the office of the clerk of the political
27 subdivision, and shall be transmitted to the reviewing officer.
28 The term of any privatization contract shall not exceed five
29 years. No amendment to a privatization contract shall be valid
30 if it has the purpose or effect of avoiding any requirement of
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1 this act.
2 Section 5. Wages.
3 For each position in which a bidder intends to employ any
4 person pursuant to the privatization contract and for which the
5 duties are substantially similar to the duties performed by a
6 regular agency employee or employees, the statement required by
7 section 4 shall include a statement of the minimum wage rate to
8 be paid for the position, which rate shall be the lesser of step
9 one of the grade or classification under which the comparable
10 regular agency employee is paid, or the average private sector
11 wage rate for the position as determined by the agency from data
12 collected from the Department of Labor and Industry. A bid for a
13 privatization contract and a privatization contract shall
14 include provisions specifically establishing the wage rate for
15 each such position, which shall not be less than the minimum
16 wage rate as described in this section.
17 Section 6. Health insurance.
18 A bid for a privatization contract and a privatization
19 contract shall include provisions for the contractor to pay not
20 less than a percentage, comparable to the percentage paid by the
21 political subdivision for its employees, of the cost of health
22 insurance plans for each employee employed not less than 20
23 hours per week pursuant to the contract. Insurance plans shall
24 provide coverage to the employee and the employee's dependents
25 during the term of the privatization contract.
26 Section 7. Enforcement.
27 Each contractor shall submit quarterly payroll records to the
28 agency, listing the name, address, Social Security number, hours
29 worked and the hourly wage paid for each employee in the
30 previous quarter. The Attorney General or the district attorney
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1 of the county in which the political subdivision is located may
2 bring a civil action for equitable relief in the court of common
3 pleas to enforce sections 5, 6 and this section or to prevent or
4 remedy the dismissal, demotion or other action prejudicing any
5 employee as a result of a report of a violation of section 5 and
6 this section.
7 Section 8. Employment.
8 A privatization contract shall contain provisions requiring
9 the contractor to offer available employee positions under the
10 contract to qualified regular employees of the agency whose
11 employment with the political subdivision is terminated because
12 of the privatization contract and who satisfy the hiring
13 criteria of the contractor. A contract shall also contain
14 provisions requiring the contractor to comply with a policy of
15 nondiscrimination and equal opportunity for all persons under
16 the laws of the United States and this Commonwealth, and to take
17 affirmative steps to provide equal opportunity for all such
18 persons.
19 Section 9. Cost estimates.
20 (a) Written estimate.--An agency shall prepare a
21 comprehensive written estimate of the cost of regular agency
22 employees providing the subject services in the most cost
23 efficient manner. The estimate shall include all direct and
24 indirect costs of regular agency employees providing the subject
25 services, including, but not limited to, pension, insurance and
26 other employee benefit costs.
27 (b) Amendments.--For the purpose of this estimate, any
28 employee organization may, at any time before the final day for
29 the agency to receive sealed bids under section 4, propose
30 amendments to any relevant collective bargaining agreement to
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1 which it is a party. The amendments shall take effect only if
2 necessary to reduce the cost estimate pursuant to this
3 subsection below the contract cost under section 11.
4 (c) Confidentiality.--The estimate shall remain confidential
5 until after the final day for the agency to receive sealed bids
6 for the privatization contract under section 4, at which time
7 the estimate shall become a public record, shall be filed in the
8 agency and in the office of the clerk of the political
9 subdivision, and shall be transmitted to the reviewing officer
10 for review pursuant to section 13.
11 Section 10. Employee organization.
12 After consulting any relevant employee organization, the
13 agency shall provide adequate resources for the purpose of
14 encouraging and assisting present agency employees to organize
15 and submit a bid to provide the subject services. In determining
16 what resources are adequate for this purpose, the agency shall
17 refer to an existing collective bargaining agreement of a
18 similar employee organization whose members perform the subject
19 services, if available, which agreement provides similar
20 resources in the same or other agencies. However, if no such
21 collective bargaining agreement exists, the agency shall refer
22 to any existing collective bargaining agreements providing the
23 resources, and shall provide the resources at the minimum level
24 of assistance provided in the agreements. The agency shall
25 consider an employee bid on the same basis as all other bids. An
26 employee bid may be made as a joint venture with other persons.
27 Section 11. Award of contract.
28 After soliciting and receiving bids, an agency shall publicly
29 designate the bidder to which it proposes to award the contract.
30 The agency shall prepare a comprehensive written analysis of the
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1 contract cost based upon the designated bid, specifically
2 including the costs of transition from public to private
3 operation, of additional unemployment and retirement benefits,
4 if any, and of monitoring and otherwise administering contract
5 performance. If the designated bidder proposes to perform any or
6 all of the contract outside the boundaries of the political
7 subdivision, the contract cost shall be increased by the amount
8 of tax revenue, if any, lost to the political subdivision by the
9 corresponding elimination of agency employees.
10 Section 12. Certification of certain matters.
11 (a) Certification.--The head of the agency and the governing
12 body of the political subdivision shall each certify in writing
13 to the reviewing officer:
14 (1) That the agency and the governing body have complied
15 with all the provisions of this act and all other applicable
16 laws.
17 (2) That the quality of the services to be provided by
18 the designated bidder is likely to satisfy the quality
19 requirements of the statement prepared under section 4 and to
20 equal or exceed the quality of services which could be
21 provided by regular agency employees under section 9.
22 (3) That the contract cost under section 11 will be less
23 than the estimated cost under section 9, taking into account
24 all comparable types of costs.
25 (4) That the designated bidder and its supervisory
26 employees, while in the employ of the designated bidder, have
27 no adjudicated record of substantial or repeated willful
28 noncompliance with any Federal or State regulatory statute,
29 including, but not limited to, statutes concerning labor
30 relations, occupational safety and health, nondiscrimination
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1 and affirmative action, environmental protection and
2 conflicts of interest.
3 (5) That the proposed privatization contract is in the
4 public interest, in that it meets the applicable quality and
5 fiscal standards set forth in this act.
6 (b) Contract.--A copy of the proposed privatization contract
7 shall accompany the certificate transmitted to the reviewing
8 officer.
9 Section 13. Privatization Review Board.
10 (a) Board established.--There is hereby established in the
11 office of the reviewing officer the Privatization Review Board
12 which shall consist of the reviewing officer or his designee,
13 who shall chair the board, and four residents of the political
14 subdivision appointed by the reviewing officer, one of whom
15 shall be a certified public accountant.
16 (b) Reviewing officer.--The reviewing officer shall provide
17 necessary facilities and staff assistance to the board.
18 (c) Objection.--An agency shall not make any privatization
19 contract and no privatization contract shall be valid if, within
20 30 days after receiving the certificate required under section
21 12, the board notifies the agency of this objection. This
22 objection shall be in writing and shall state specifically the
23 board's finding that the agency has failed to comply with one or
24 more requirements of this act, including that the board finds
25 incorrect, based on independent review of all the facts, any of
26 the findings required by section 12.
27 (d) Review.--For the purpose of reviewing the agency's
28 compliance and certificate the board may require by summons the
29 attendance and testimony under oath of witnesses and the
30 production of books, papers and other records relating to such
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1 review. All provisions of the law relative to summonses in civil
2 cases, including the manner of service and the compensation of
3 witnesses who are not political subdivision or State employees
4 shall apply to the summonses. The summonses shall be enforced
5 pursuant to the applicable laws of this Commonwealth.
6 (e) Final and binding.--The objection of the board shall be
7 final and binding on the agency, unless the board thereafter in
8 writing withdraws the objection, stating specific reasons based
9 upon a revised certificate by the agency and by the governing
10 body of the political subdivision and upon the board's review
11 thereof.
12 Section 14. Construction.
13 The provisions of this act are in addition to any other
14 provisions of law which would otherwise apply to privatization
15 contracts and this act is not intended to preempt or repeal
16 those provisions.
17 Section 15. Regulations.
18 The board may promulgate the regulations necessary to carry
19 out its functions under this act.
20 Section 16. Applicability.
21 This act shall apply to all privatization contracts executed
22 on or after the effective date of this act.
23 Section 17. Effective date.
24 This act shall take effect immediately.
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