Assembly Passes Proposed Bill to Require Cities to Review Automatically Renewing Contracts

A bill that would require cities and other local governments to review automatically renewing contracts with private businesses over $250,000 every three years has cleared a major hurdle.

Assembly Bill 1333, authored by Assemblyman Roger Hernandez, D-West Covina, passed the Assembly Wednesday with a 43-25 vote.

Diamond Bar and Walnut Assemblyman Curt Hagman, R-Chino Hills, voted against the measure.

As part of the review, the proposed bill requires local governments to note if the businesses they contract with are paying prevailing wage.

“This bill protects the public’s trust in our local communities; the public has a right to know the terms of every agreement their city signs on to," Hernandez said in a news release. "Automatic renewals will not be accepted merely on good faith.  I am working to make sure there is transparency in good government.”  

The automatic renewal of agreements, also known as "evergreen contracts,"provides no competition, allowing businesses to offer fewer services at a greater cost, Hernandez said, adding that the exclusivity also financially burdens the taxpayers.

Hernandez points to the city of Montebello awarding exclusive trash contracts in 2008, a decision that resulted in the "ousting of 12 independent haulers from the bargaining table and sparked a recall of elected officials."
                                                                                                           "Residents deserve healthy competition from other businesses that can provide the same quality of service at much discounted rates," Hernandez said.  "Promoting competition for government contracts is good governance. It safeguards residents who are receiving the best rates while seeking to prevent the exploitation of workers.”

What do you think of Hernandez' proposed bill?  Share your thoughts in comments.