Tim Cromartie is a legislative representative for the League and can be reached at tcromartie@cacities.org.

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In simple terms, a mandate is a requirement by state government directing local government to provide a service or a higher level of an existing service. For local government to be paid by the state for complying with a mandate, it must be found to be a reimbursable mandate.

Who Decides What Constitutes A Reimbursable Mandate?

In crafting the language for new laws, the Legislature states explicitly whether or not a requirement is a “state-mandated local program,” a code phrase that imposes new or increased requirements on local agencies. When crafting new regulations, state agencies also have the authority to make an initial determination of whether a new requirement rises to the level of a mandate. However, neither the Legislature nor state agencies have the final word on the subject. They do not, for example, determine which mandates are reimbursable. That task falls to the Commission on State Mandates.

Role of the Commission on State Mandates

The Commission on State Mandates is the final arbiter of most mandate claims. Decisions of the commission are subject to review by the courts. The state Department of Finance often brings legal challenges to the courts in cases where the commission has found a mandate to be reimbursable. The courts may uphold the commission’s decisions or reverse them. Final decisions of the courts are binding on both the commission and the state.

The Commission on State Mandates has four key functions:

1. It hears and decides test claims alleging that the Legislature or a state agency imposed a reimbursable mandate upon local agencies and school districts. Test claims are exactly what the name implies: Claims testing whether a new requirement constitutes a reimbursable mandate that obligates the state to reimburse locals for the expense they incur in complying with that requirement;
2. It hears and decides claims alleging that the state controller incorrectly reduced payments to local agencies and school districts;
3. It hears and decides requests to adopt new test claim decisions that would supersede previously adopted test claims if there is evidence that the state’s liability for that earlier decision under the California Constitution has been modified based on a subsequent change in the law; and
4. It determines the existence of significant financial distress for counties seeking to reduce their General Assistance payments.

The following examines each of these functions in greater detail.

Reimbursable Mandates Defined

Reimbursable mandates are new obligations regarding local activity — for example, a new procedure for the police or courts to follow in dealing with domestic violence incidents. The state imposes a mandate directly on local agencies; in other words, such mandates are not the result of a new federal law or a voter-approved state initiative but rather new state legislation or state regulations.

The nature of this obligation forces local agencies to pay for a new governmental program or procedure, which in turn puts pressure on local tax revenues. In the case of domestic violence offenses, this could be a new law requiring district attorneys to perform database searches of domestic violence defendants to find out if they have committed prior related offenses and requiring those offenses to be admitted into evidence in court.

A decision by the Commission on State Mandates that a new requirement is in fact a reimbursable mandate automatically triggers an obligation for the state to reimburse local governments for expenses incurred in complying. In general, the state is required to reimburse (fund) or suspend any mandate found to be reimbursable.

Incorrect Reduction of Payments

If the Commission on State Mandates determines that the State Controller’s Office has incorrectly reduced mandate reimbursement payments to local governments through an accounting error or other reason, the State Controller’s Office is obligated to make good the shortfall in payments. However, there does not appear to be a specific deadline by which this additional payment or payments must be made.

Adoption of New Test Claim Decisions

The Commission on State Mandates will receive a request from the local agency subject to a mandate to adopt a new test claim decision if — since the time that it decided a prior related test claim — a new statute or regulation has been passed that alters the state’s liability in a way that affects the prior decision. In deciding such questions, the commission relies on the general rule on reimbursable mandates found in Article XIIIB, Section 6 of the California Constitution.

Significant Financial Distress

Counties are the primary entities through which General Assistance is distributed to the indigent and needy. In times of fiscal stress, counties may need to reduce the level of such assistance but can do so only if the Commission on State Mandates issues a finding of significant financial distress.

Suspended Mandates and What Cities Can Do About Them

Given prevailing budget conditions and California’s ongoing dependence on income tax revenue for the robust health of its General Fund, the recent trend in state government has been for the Department of Finance to annually scour the list of state-mandated local programs and suspend as many as possible. Under Governor Brown, who has publicly expressed the need to restore control and funding responsibility for many government programs to the local level, this trend is expected to continue into the foreseeable future — at least until the state experiences a sustained economic recovery, and possibly beyond that time.

Mandates and Proposition 1A

California voters approved Proposition 1A in November 2004. Among its other provisions, Prop. 1A strengthened protections for local governments against unfunded mandates by requiring the state, for the first time, to suspend any mandate it did not fund during any given budget cycle.

The legal effect of a suspension is that local governments are no longer required to comply with a suspended mandate so, in theory, it provides some fiscal relief. However, in practice, suspended mandates have proved challenging for local governments. In the case of certain mandates, local compliance efforts have to be maintained for reasons related to purely local political pressures or priorities. One example of this is mandatory holding periods for stray animals before they can be euthanized.

In addition, once a mandate is suspended, it not only relieves the state of the responsibility to fund that mandate going forward, it also allows the state to defer payments intended to reimburse locals for expenses incurred as a result of their compliance efforts prior to the date of the suspension. Depending on the mandate, this can amount to millions of dollars per jurisdiction. The deferment remains in force until the state lifts the suspension. In practice, once a mandate is suspended, the suspension is rarely lifted, and the local agencies often go unpaid in the meantime for prior compliance efforts.

Cities have a range of options as to what they can do in response. As previously mentioned, in some cases — for political or other reasons — cities have little choice but to continue the activities associated with unfunded mandates. But it may be useful to explore the range of options, given the steadily shrinking volume of reimbursement coming from the state.

For example:

• Cities can continue with previously mandated activities, knowing that the costs will just have to be absorbed locally;
• Cities can opt to discontinue compliance efforts for the mandates that have been suspended; and
• Cities can seize the opportunity to examine the degree to which the underlying policy or societal goal driving the suspended mandates matches local priorities and, to the degree that they do, explore ways to create greater efficiencies through cost-saving best practices that may reduce related administrative burdens.

Recently Suspended Mandates

In fiscal year 2013–14, the State of California suspended a total of 60 mandates. Of these, three were suspended for the first time and affected cities by relieving them of previously mandated costs. These mandates include:

1. Domestic violence background checks;
2. Identity theft; and
3. Voter identification procedures.

Domestic Violence Background Checks

This mandate requires district attorneys and prosecuting city attorneys to perform database searches of persons charged with domestic violence and of persons against whom a domestic violence restraining order may be issued. Information on prior related offenses and/or incidents must be presented to the courts for consideration under certain circumstances.

The cumulative statewide cost in claims is $19.2 million. The average annual cost is $1.74 million (over 11 years). The actual annual cost exceeded $2.2 million over the past three fiscal years.

In most cases, counties shoulder this responsibility exclusively. Suspension of this mandate may affect cities that have a city prosecutor. The state controller estimates that 33 percent, or $6.3 million, of these claims were generated by cities.

Cost-saving best practices include:

• Expanding use of digital/electronic search engines and databases;
• Systematically saving and storing search results by law enforcement entities in-house to save costs of compliance regarding repeat offenders;
• Exploring the option of pooling resources with other cities and/or the county to lower cost of funding this activity; and
• Consulting the local district attorney for guidance.

Identity Theft

This mandate requires local law enforcement agencies to take a police report and begin an investigation when a complainant residing within their jurisdiction reports suspected identity theft.

The cumulative statewide cost in claims is $83.4 million. The average annual cost is $6.4 million (over 13 years). The actual annual cost exceeded $9 million over the past five fiscal years.

Reimbursement claims have been filed by 38 percent of cities and 36 percent of counties. Thus it appears that a majority of acts of reporting triggered by this mandate are performed by municipal police departments, which receive the majority of complaints about incidents of identity theft. Over a period of nine fiscal years, the City of Los Angeles alone accounted for 38 percent of the identity theft reports statewide. Inquiries are pending with the Commission on State Mandates to determine how much of the cumulative statewide cost is accounted for by cities.

Cost-saving best practices include:

• Considering the option of pooling investigatory resources with counties;
• Developing uniform procedures for identity theft investigation, drawing from federal, state and county resources; and
• Coordinating with local banks, many of which can provide financial information packets prepared by bank fraud investigators to be filled out by identity theft victims.

Voter Identification Procedures

This mandate requires elections officials to compare the signature on each provisional ballot envelope with the signature on the voter’s affidavit of registration, completed at the time that he or she registers to vote.

The cumulative statewide cost in claims is $7.5 million. The average annual cost is $750,000 (over 10 years). The actual annual cost exceeded $1.2 million in two of the past three fiscal years.

The impact on cities is likely minimal. This is primarily a county responsibility, as the Registrar of Voters is typically a county-level office. However, at least two cities in California shoulder this responsibility, based on reimbursement claims filed between 2002-03 and 2010-11. In the same period, 17 counties filed similar claims. Inquiries are pending with the Commission on State Mandates to determine how much of the cumulative statewide cost is accounted for by cities.

Consult the California Association of Clerks and Elections Officials (at www.caceo58.org/home-page) for information on cost-saving best practices.

More Information Online

For a summary of previously suspended mandates, including animal adoption, domestic violence information, inmate AIDS testing, law enforcement sexual harassment training, missing persons reports, photographic record of evidence, sex offenders disclosure by law enforcement officers and stolen vehicle notification, see below.

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Exceptions: When a Fee May Be Charged

Local officials are justifiably frustrated by the increase in state mandates and the impact of compliance on local budgets. However, legislation requiring a local agency to provide a mandated service often does not rise to the level of a “reimbursable” mandate because the agency can charge a fee to cover that service. Legislation for this type of mandate includes language that declares no reimbursement is required because “… the local agency has the authority to levy service charges, fees or assessments sufficient to pay for the program or level of service.” Examples of mandates that are not reimbursable because of the local agency’s fee authority include solid waste and recycling requirements. 

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Previously Suspended Mandates

Animal Adoption

Cumulative Statewide Cost in Claims: $158 million

Average Annual Cost: $13.1 million (over 12 years)

Actual Annual Cost: Exceeded $20 million in two of the last three fiscal years

Summary: Requires local agencies to hold stray animals for an increased period (from three to six days) before they can be euthanized; also requires that impounded animals promptly receive necessary veterinary care.

Impact on Cities: Responsibility for this mandate is jointly shouldered by cities, counties, cities and counties, special districts and joint powers authorities. This mandate has a direct impact on cities to the degree they operate animal shelters, and one city was part of the test claim. An estimated 80 percent of the cumulative statewide cost, or $126.4 million, is accounted for by cities.

Cities may want to consider the following.

• Evaluate what is more cost effective: maintaining a municipal animal shelter or contracting with the county?
• Explore consolidation or joint animal shelter facilities with home county; and
• Explore possibility of regional animal shelter for even greater cost savings.

Domestic Violence Information

Cumulative Statewide Cost in Claims: $20 million over 4 years (1985-86 to 1988-89)

Average Annual Cost: $5 million

Actual Annual Cost: No recent data available

Summary: Required all law enforcement agencies in California to develop, adopt and  implement written policies and standards for officers response to domestic violence calls by Jan. 1, 1986. Also required law enforcement agencies to develop incident report forms and maintain records of all protection orders with respect to domestic violence incidents.

Impact on Cities: Substantial initial fiscal impact on municipal police departments charged with developing both policies and appropriate forms. These costs likely dropped dramatically once this work and any associated training were completed. This could be an example of a suspended mandate that has been or could be incorporated into best practices and has likely seen a steep decline in reimbursable costs.

Cost-Saving Best Practices: This is not an issue and has long since been incorporated into local police departments’ standard operating procedures.

Inmate AIDS Testing

Cumulative Statewide Cost in Claims: $5.6 million over 6 years

Average Annual Cost: $916,000

Actual Annual Cost: No recent data available

Summary: Required that all law enforcement employees report to the chief medical officer any instance in which they come into contact with the bodily fluids of an inmate, a person under arrest or in custody, and a parolee or probationer.

Impact on Cities: Probably minor. The bulk of law enforcement personnel affected by this mandate serve at the county or state level, given the volume of inmates in county jails and state prisons. Police officers are likely to have more limited, less sustained exposure to arrestees who in most instances are released within a few hours or processed and transferred to a county jail. Inquiries are pending with the Commission on State Mandates to determine how much of the cumulative statewide cost is accounted for by cities.

Law Enforcement Sexual Harassment Training

Cumulative Statewide Cost in Claims: $2.4 million over 8 years

Average Annual Cost: $300,000

Actual Annual cost: No recent data available

Summary: Requires that city police departments, county sheriffs’ departments, districts and state university departments follow sexual harassment complaint guidelines developed by the Commission on Peace Officer Standards and Training (POST).

Impact on Cities: Substantial one-time costs associated with developing formal complaint policies and procedures for officers who are victims of sexual harassment. This is likely another example of a suspended mandate that has been or could be incorporated into best practices and has likely seen a steep decline in reimbursable costs.

Cost-Saving Best Practices: No recommendations, as these have already been incorporated into departmental standard operating procedures.

Missing Persons Report

Cumulative Statewide Cost in Claims: Unknown – estimate at $90 million

Average Annual Cost: $5 million (based on 1994-95 figures, last reported)

Actual Annual Cost: No recent data available

Summary: Requires law enforcement to confer with the coroner or medical examiner and to expedite submission of a missing persons report (including dental records) to the Department of Justice in cases where a person under age 18 is reported missing and law enforcement determines it is under suspicious circumstances.

Impact on Cities: Significant and ongoing, because local law enforcement is often the initial point of law enforcement contact on missing persons cases. However, this mandate is a clear candidate for best practices that would be incorporated in routine law enforcement procedures.

Cost-Saving Best Practices: No recommendations, as these have already been incorporated into departmental standard operating procedures.

Photographic Record of Evidence

Cumulative Statewide Cost in Claims: $2.5 million (over 7 years)

Average Annual Cost: $357,000

Actual Annual Cost: Exceeded $110,000 in two of past three fiscal years prior to suspension

Summary: Requires, upon court order, that a photographic record of evidence — and in some instances a certified chemical analysis of the exhibit — be substituted for those criminal trial exhibits that pose a security, storage or safety problem, or if the exhibit by its nature is toxic and poses a health hazard.

Impact on Cities: Significant and ongoing, as police departments are frequently involved in the collection of evidence anidence used in criminal prosecutions. Requires development of policies, procedures and manuals for implementation, and maintenance of photographic files.

Cities may want to consider the following.

• Contract out for chemical analysis as needed and, to the extent local resources allow, consider issuing periodic Requests for Proposals to ensure implementation with maximum cost-effectiveness;
• Devise expedited process for securing court orders where needed, perhaps involving electronic approval; and
• Rely on local district attorney to set policy and provide guidance. Best practices will vary based on jurisdictional requirements.

Sex Offenders: Disclosure by Law Enforcement Officers

Cumulative Statewide Cost in Claims: $32.7 million over 8 years

Average Annual Cost: $4 million

Actual Annual Cost: No recent figures available

Summary: Requires local law enforcement (cities, counties and community college districts) to notify the Department of Justice regarding the registration of certain convicted sex offenders, and provides for public disclosure of the identity of registered sex offenders by local law enforcement agencies. Exempts cities with populations of less than 200,000.

Impact on Cities: Significant and ongoing.

Cost-Saving Best Practices: No recommendations, as these have already been incorporated into departmental standard operating procedures.

Stolen Vehicle Notification

Cumulative Statewide Cost in Claims: $1.2 million over 6 years

Average Annual Cost: $200,000       

Actual Annual Cost: No recent figures available

Summary: Requires the original reporting law enforcement agency, within 48 hours of being notified of the recovery of a stolen vehicle (excluding weekends and holidays), to notify the reporting party of the location and condition of the recovered vehicle.

Impact on Cities: Minor to significant, and ongoing.

Cost-Saving Best Practices: No recommendations, as these have already been incorporated into departmental standard operating procedures.

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This article appears in the March 2014 issue of Western City
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