PRINTER'S NO. 1971
No. 1610 Session of 1997
INTRODUCED BY DERMODY, ITKIN, ROBINSON, READSHAW, VAN HORNE,
TRELLO, OLASZ, DeLUCA, LEVDANSKY, MARKOSEK, BELARDI, HALUSKA,
TIGUE, MELIO, COY, McCALL, BELFANTI, JOSEPHS, C. WILLIAMS,
MUNDY, ROONEY, SCRIMENTI AND CASORIO, JUNE 9, 1997
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, JUNE 9, 1997
AN ACT
1 Establishing privatization review boards in all political
2 subdivisions and providing for their powers and duties.
3 TABLE OF CONTENTS
4 Section 1. Short title.
5 Section 2. Definitions.
6 Section 3. Validity of contracts.
7 Section 4. Contracts generally.
8 Section 5. Wages.
9 Section 6. Health insurance.
10 Section 7. Enforcement.
11 Section 8. Employment.
12 Section 9. Cost estimates.
13 Section 10. Employee organization.
14 Section 11. Award of contract.
15 Section 12. Certification of certain matters.
16 Section 13. Privatization Review Board.
17 Section 14. Construction.
1 Section 15. Regulations.
2 Section 16. Applicability.
3 Section 17. Effective date.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Political
8 Subdivision Privatization Review Board Act.
9 Section 2. Definitions.
10 As used in this act the following words and phrases shall
11 have, unless the context clearly indicates otherwise, the
12 meaning given to them in this section:
13 "Agency." An office, department, division, board, commission
14 or other office of the political subdivision.
15 "Dependent." The spouse and children of an employee, if such
16 persons would qualify for dependent status under the Internal
17 Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.)
18 or for whom a support order has been or could be granted under
19 the laws of this Commonwealth.
20 "Political subdivision." Cities of the first class, second
21 class, second class A and third class and all counties of every
22 class or a home rule municipality which is or was a first class
23 city, second class city, second class A city, third class city
24 or a home rule county.
25 "Privatization contract." An agreement or combination or
26 series of agreements by which a nongovernmental person or entity
27 agrees with an agency to provide services, valued at $50,000 or
28 more for all counties and for cities of the first and second
29 class and at $25,000 or more for all other political
30 subdivisions, which are substantially similar to or in lieu of,
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1 services theretofore provided, in whole or in part, by regular
2 employees of an agency. Any subsequent agreement, including any
3 agreement from a rebidding of previously privatized service, or
4 any agreement renewing or extending a privatization contract,
5 shall not be considered a privatization contract. An agreement
6 solely to provide legal, management, consulting, planning,
7 engineering or design services shall not be considered a
8 privatization contract.
9 "Reviewing officer." The controller of the political
10 subdivision.
11 Section 3. Validity of contracts.
12 No agency shall make any privatization contract and no such
13 contract shall be valid unless the agency complies with the
14 provisions of this act.
15 Section 4. Contracts generally.
16 The agency shall prepare a specific written statement of the
17 services proposed to be the subject of the privatization
18 contract, including the specific quantity and standard of
19 quality of the subject services. The agency shall solicit
20 competitive sealed bids for the privatization contracts based
21 upon this statement. The day designated by the agency upon which
22 it will accept these sealed bids shall be the same for any and
23 all parties. This statement shall be a public record, shall be
24 filed in the agency and in the office of the clerk of the
25 political subdivision, and shall be transmitted to the reviewing
26 officer. The term of any privatization contract shall not exceed
27 five years. No amendment to a privatization contract shall be
28 valid if it has the purpose or effect of avoiding any
29 requirement of this act.
30 Section 5. Wages.
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1 For each position in which a bidder will employ any person
2 pursuant to the privatization contract and for which the duties
3 are substantially similar to the duties performed by a regular
4 agency employee or employees, the statement required by section
5 4 shall include a statement of the minimum wage rate to be paid
6 for said position, which rate shall be the lesser of step one of
7 the grade or classification under which the comparable regular
8 agency employee is paid, or the average private sector wage rate
9 for said position as determined by the agency from data
10 collected from the Department of Labor and Industry. Every bid
11 for a privatization contract and every privatization contract
12 shall include provisions specifically establishing the wage rate
13 for each such position, which shall not be less than the minimum
14 wage rate as described in this section.
15 Section 6. Health insurance.
16 Every such bid and contract shall also include provisions for
17 the contractor to pay not less than a percentage, comparable to
18 the percentage paid by the political subdivision for its
19 employees, of the cost of health insurance plans for every
20 employee employed not less than 20 hours per week pursuant to
21 such contract. Insurance plans shall provide coverage to the
22 employee and the employee's spouse and dependent children.
23 Section 7. Enforcement.
24 Each contractor shall submit quarterly payroll records to the
25 agency, listing the name, address, Social Security number, hours
26 worked and the hourly wage paid for each employee in the
27 previous quarter. The Attorney General or the district attorney
28 of the county in which the political subdivision is located may
29 bring a civil action for equitable relief in the court of common
30 pleas to enforce sections 5, 6 and this section or to prevent or
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1 remedy the dismissal, demotion or other action prejudicing any
2 employe as a result of a report of a violation of sections 5,
3 and this section.
4 Section 8. Employment.
5 Every privatization contract shall contain provisions
6 requiring the contractor to offer available employee positions
7 under the contract to qualified regular employees of the agency
8 whose employment with the political subdivision is terminated
9 because of the privatization contract and who satisfy the hiring
10 criteria of the contractor. Every such contract shall also
11 contain provisions requiring the contractor to comply with a
12 policy of nondiscrimination and equal opportunity for all
13 persons under the laws of the United States and this
14 Commonwealth, and to take affirmative steps to provide such
15 equal opportunity for all such persons.
16 Section 9. Cost estimates.
17 (a) Written estimate.--The agency shall prepare a
18 comprehensive written estimate of the cost of regular agency
19 employees providing the subject services in the most cost
20 efficient manner. The estimate shall include all direct and
21 indirect costs of regular agency employees providing the subject
22 services, including, but not limited to, pension, insurance and
23 other employee benefit costs.
24 (b) Amendments.--For the purpose of this estimate, any
25 employee organization may, at any time before the final day for
26 the agency to receive sealed bids under section 2, propose
27 amendments to any relevant collective bargaining agreement to
28 which it is a party. Any such amendments shall take effect only
29 if necessary to reduce the cost estimate pursuant to this
30 subsection below the contract cost under section 11.
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1 (c) Confidentiality.--The estimate shall remain confidential
2 until after the final day for the agency to receive sealed bids
3 for the privatization contract under section 2, at which time
4 the estimate shall become a public record, shall be filed in the
5 agency and in the office of the clerk of the political
6 subdivision, and shall be transmitted to the reviewing officer
7 for review pursuant to section 13.
8 Section 10. Employee organization.
9 After consulting any relevant employee organization, the
10 agency shall provide adequate resources for the purpose of
11 encouraging and assisting present agency employees to organize
12 and submit a bid to provide the subject services. In determining
13 what resources are adequate for this purpose, the agency shall
14 refer to an existing collective bargaining agreement of a
15 similar employee organization whose members perform the subject
16 services, if available, which agreement provides similar
17 resources in the same or other agencies. If however no such
18 collective bargaining agreement exists, the agency shall refer
19 to any existing collective bargaining agreements providing such
20 resources, and shall provide such resources at the minimum level
21 of assistance provided in said agreements. The agency shall
22 consider any such employee bid on the same basis as all other
23 bids. An employee bid may be made as a joint venture with other
24 persons.
25 Section 11. Award of contract.
26 After soliciting and receiving bids, the agency shall
27 publicly designate the bidder to which it proposes to award the
28 contract. The agency shall prepare a comprehensive written
29 analysis of the contract cost based upon the designated bid,
30 specifically including the costs of transition from public to
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1 private operation, of additional unemployment and retirement
2 benefits, if any, and of monitoring and otherwise administering
3 contract performance. If the designated bidder proposes to
4 perform any or all of the contract outside the boundaries of the
5 political subdivision, said contract cost shall be increased by
6 the amount of tax revenue, if any, lost to the political
7 subdivision by the corresponding elimination of agency
8 employees.
9 Section 12. Certification of certain matters.
10 (a) Certification.--The head of the agency and the governing
11 body of the political subdivision shall each certify in writing
12 to the reviewing officer:
13 (1) That the agency and the governing body have complied
14 with all the provisions of this act and all other applicable
15 laws.
16 (2) That the quality of the services to be provided by
17 the designated bidder is likely to satisfy the quality
18 requirements of the statement prepared under section 2 and to
19 equal or exceed the quality of services which could be
20 provided by regular agency employees under section 9.
21 (3) That the contract cost under section 11 will be less
22 than the estimated cost under section 9, taking into account
23 all comparable types of costs.
24 (4) That the designated bidder and its supervisory
25 employees, while in the employ of said designated bidder,
26 have no adjudicated record of substantial or repeated wilful
27 noncompliance with any Federal or State regulatory statute,
28 including, but not limited to, statutes concerning labor
29 relations, occupational safety and health, nondiscrimination
30 and affirmative action, environmental protection and
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1 conflicts of interest.
2 (5) That the proposed privatization contract is in the
3 public interest, in that it meets the applicable quality and
4 fiscal standards set forth in this act.
5 (b) Contract.--A copy of the proposed privatization contract
6 shall accompany the certificate transmitted to the reviewing
7 officer.
8 Section 13. Privatization Review Board.
9 (a) Board established.--There is hereby established in the
10 office of the reviewing officer the Privatization Review Board
11 which shall consist of the reviewing officer or his designee,
12 who shall chair the board, and four residents of the political
13 subdivision appointed by the reviewing officer, one of whom
14 shall be a certified public accountant.
15 (b) Reviewing officer.--The reviewing officer shall provide
16 necessary facilities and staff assistance to the board.
17 (c) Objection.--An agency shall not make any privatization
18 contract and no such contract shall be valid if, within 30 days
19 after receiving the certificate required under section 12, the
20 board notifies the agency of this objection. This objection
21 shall be in writing and shall state specifically the board's
22 finding that the agency has failed to comply with one or more
23 requirements of this act, including that the board finds
24 incorrect, based on independent review of all the facts, any of
25 the findings required by section 12.
26 (d) Review.--For the purpose of reviewing the agency's
27 compliance and certificate the board may require by summons the
28 attendance and testimony under oath of witnesses and the
29 production of books, papers and other records relating to such
30 review. All provisions of the law relative to summonses in civil
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1 cases, including the manner of service and the compensation of
2 witnesses who are not political subdivision or State employees
3 shall apply to such summonses. Such summonses shall be enforced
4 pursuant to the applicable laws of this Commonwealth.
5 (e) Final and binding.--The objection of the board shall be
6 final and binding on the agency, unless the board thereafter in
7 writing withdraws the objection, stating specific reasons based
8 upon a revised certificate by the agency and by the governing
9 body of the political subdivision and upon the board's review
10 thereof.
11 Section 14. Construction.
12 The provisions of this act are in addition to any other
13 provisions of law which would otherwise apply to privatization
14 contracts and this act is not intended to preempt or repeal such
15 provisions.
16 Section 15. Regulations.
17 The board may promulgate the regulations necessary to carry
18 out its functions under this act.
19 Section 16. Applicability.
20 This act shall apply to all privatization contracts executed
21 on or after the effective date of this act.
22 Section 17. Effective date.
23 This act shall take effect immediately.
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