COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

September 29, 2004

BOARD MEETING DATE:

October 5, 2004

TO:

Honorable Board of Supervisors

FROM:

John Maltbie, County Manager

SUBJECT:

County Manager’s Report #14

November General Election Proposition Summary

Fifteen propositions will appear before voters on the November 2004 General Election Ballot. The full Board earlier acted on some of the propositions. Those actions include:

Support of:

Propositions 1A, 59 and 63

Opposition to:

Propositions 68, 70

The below recommendations for Items A-E, reflect the balance of propositions, on which the Legislative Committee have made recommendations.

A.

Proposition 64, Limits on Private Enforcement of Unfair Business Competition Laws

Recommendation

Adopt a resolution in opposition to Proposition 64, Limits on Private Enforcement of Unfair Business Competition Laws.

Background

Proposition 64 would limit the use of private enforcement actions of the Unfair Business Competition laws. Generally, it would limit such actions to the Attorney General, local prosecutors and those directly injured. It would also restrict the use of civil penalties to the enforcement of consumer protection laws.

Under California’s current unfair competition law, the Attorney General, local prosecutors and injured parties can sue to enforce the unfair business competition laws. Current law also allows persons acting in the interest of the public to sue. They do not need to show actual harm. In cases brought by the Attorney General or a local prosecutor, violators may be required to pay civil penalties, which can be used for general purposes.

Proposition 64 would prohibit unfair competition lawsuits from plaintiffs, save the Attorney General and local prosecutors, that cannot show injury in fact and lost money or property as a result of such unfair competition. Proposition 64 would also limit the use of civil penalties secured by the Attorney General and local prosecutors to the enforcement of consumer protection laws. For those lawsuits brought on behalf of others, the requirements of a class action lawsuit must be satisfied.

Discussion

Proponents argue that Proposition 64 will prevent frivolous lawsuits including those targeted at small business owners. They argue that California’s unfair business competition laws effectively delegate governments’ enforcement responsibilities to private individuals. As a result, businesses, including small businesses, are subject to “frivolous” lawsuits. Regardless of the veracity of the individual claims, some argue, “the law has become a means of generating attorney fees without any corresponding public benefit.”

In contrast, opponents argue that Proposition 64 goes too far in limiting lawsuits. They argue that the use of public interest suits to enforce environmental and consumer protection laws has been effective in ensuing compliance with an assortment of California laws. The implementation of Proposition 64 would limit their ability to enforce laws that would otherwise be violated without threat of penalty.

Vision Alignment

Proposition 64, if approved by voters, could threaten the County’s commitment to preserve and provide access to our natural environment and impede Goal #14 to ensure that important natural resources are preserved and enhanced through environmental stewardship.

Fiscal Impact

Unknown

B.

Proposition 66, Limitations on “Three Strikes” Law, Sex Crimes, Punishment

Recommendation

Adopt a resolution in opposition to Proposition 66, Limitations on “Three Strikes” Law, Sex Crimes.

Background

Proposition 66 would require that a felony triggering a longer sentence under “Three Strikes” be a serious or violent felony instead of any felony as is currently required. The proposition would also limit the number of felonies considered serious or violent, require each strike conviction to be tried separately. The proposition would require re-sentencing for certain “Three Strikes” convicts and would increase penalties for certain sex offenses against children.

Under current law, “Three Strikes,” a person with a one violent or serious offense conviction who commits any new felony (a “second strike”) could receive twice the normal prison sentence for the new felony. A person who commits two or more prior violent or serious offences and then commits any new felony (a “third strike”) would automatically receive 25 years to life in prison.

Proposition 66 would require that felonies triggering longer sentences under the “Three Strikes” law be serious or violent felonies. Under current law, any felony can be used to satisfy the “Three Strikes” requirement. The proposition would also limit the number of felonies considered serious or violent. Felonies no longer considered serious or violent under Proposition 66 include, in part, attempted burglary, conspiracy to commit assault and participation of felonies committed by a criminal street gang.

Proposition 66 would also require that each conviction leading to a strike be tried separately from the other strike convictions. The proposition would also require those serving indeterminate life sentences based on a “third strike” of a nonserious or nonviolent nature to be re-sentenced. In addition, the proposition would increase penalties for sex offenders of children under the age of 14.

Discussion

While the limitation of felonies considered serious or violent will limit the applicability of “Three Strikes” the reclassification of such felonies could also impact other, non-“Three Strikes” aspects of sentencing.

According to opponents, Proposition 66 could result in the re-sentencing and release of 26,000 felons. They also contend that the “strike per trial” provision of the proposition would prohibit multiple convictions for the same nexus of crime to satisfy more than one strike. The re-sentencing requirement could create a significant burden on courts.

Proponents argue that Proposition 66 restores the “Three Strikes” law to its intended purpose—to keep serious and violent felons in prison saving taxpayers money. Proponents also argue that the use of “Three Strikes” varies depending upon the county in which the case is tried.

Vision Alignment

Proposition 66, if approved by voters, could threaten the County’s commitment to ensure basic health and safety for all and impede Goal #7, to maintain and enhance the public safety for all residents and visitors.

Fiscal Impact

Unknown, but potentially significant. The LAO anticipates increased local government costs to respond to the re-sentencing requirement and other ancillary effects potentially costing into the tens of millions of dollars statewide.

C.

Proposition 67, Emergency Medical Services, Funding, Telephone Surcharge

Recommendation

Adopt a resolution in support of Proposition 67, Emergency Medical Services, funding, telephone surcharge.

Background

Proposition 67 would impose a 3% increase to certain telephone use surcharge rates to fund physicians for uncompensated emergency care, hospitals for emergency services, community clinics for uncompensated care, emergency personnel training/equipment, and emergency telephone system improvements.

State law requires that hospitals provide emergency medical care regardless of the patient’s ability to pay. While there are several sources of revenue to help hospitals, especially public hospitals, to pay for uninsured patient care, a growing amount of costs must be born by the hospital.

Proposition 67 would generate the bulk of revenue from a 3% emergency telephone surcharge on calls made within California. While the there would be a general 50 cent cap on residential lines, the cap would not apply to cell phones and commercial telephone lines.

Proposition 67 would also fix $32 million annual appropriation of Proposition 99 (tobacco tax) revenues to uncompensated care costs. While this allocation has been made in the past, in the future it will require other programs receiving Proposition 99 revenues to reduce their share or seek alternative sources as the Proposition 99 revenue shrinks with the reduction in smoking in California.

While the funds would serve several accounts, the majority of resources would go to reimburse hospitals for the cost of uncompensated emergency and trauma care (60%) and to reimburse claims filed by physicians who are not employed by hospitals and who provide uncompensated emergency services to patients (30%).

The LAO notes, “Both the Emergency and Trauma Physician Unpaid Claims Account and the Emergency and Trauma Physician Uninsured Account would be administered by DHS, but a county could apply for and obtain permission to administer the funds allocated from these accounts within its jurisdiction.”

Discussion

Opponents argue that Proposition 67’s identified funding source lacks any nexus with the services provided with those resources. They also argue that it does not provide adequate audits or protections to ensure that the resources are used appropriately. The California Association of Public Hospitals has not taken a position on Proposition 67 due to their concerns about the distribution of funds between public and private hospitals.

In contrast, proponents note that the emergency and trauma system in California is in crisis. They note that over 60 hospitals have closed their emergency rooms and trauma facilities in the past ten years.

San Mateo Medical Center staff notes emergency room closures as key evidence in the growing problem of funding uninsured emergency room care. According to the proponents, Proposition 67 could generate over $10 million annually for San Mateo County’s emergency rooms. And possibly an estimated $1 million for the Medical Center.

The fiscal impact on County phone costs will be minimal. The County is exempt from 911 surcharges on landlines and thus, the increase in surcharge will not impact the County’s landlines. Information Services notes that County cell phones are subject to 911 surcharges. They are investigating whether those charges are justified. Assuming that they are, the increase in cell phone, 911 surcharges will be about $5,500 per year. While they do not oversee all cell phones for the County, they estimate they manage the majority.

Vision Alignment

Support of Proposition 67 furthers the County’s commitment to ensure basic health and safety for all and supports Goal #5 that residents have access to healthcare and preventative care.

Fiscal Impact

Less than $11,000 in 911 surcharge costs. Unknown revenue generation for SMMC.

D.

Proposition 69, DNA Samples, Collection, Database, Funding

Recommendation

Adopt a resolution in support of Proposition 69, DNA Samples, Collection, Database, Funding.

Background

Proposition 69 expands DNA collection to all convicted adult and juvenile felons, adults and juveniles convicted of non-felony sex offenses or arson (or attempt of such offenses), adults and juveniles arrested for or charged with felony sex offenses, murder, or voluntary manslaughter (or the attempt of such offenses).

Under current law, adults and juveniles convicted of felony offense are required to provide DNA samples. The California Department of Justice maintains the DNA databank, which is used to compare evidence collected from crime scenes for possible matches.

Proposition 69 would expand DNA collection to all adults and juveniles convicted of any felony; those convicted of non-felony sex and arson offenses (or attempts) and those arrested for or charged with felony sex offenses, murder or voluntary manslaughter (or attempts). In 2009, it would be expanded to include adults arrested or charged for any felony.

Proposition 69 would fund the expanded collection requirements through an increase in penalties ($1 increase for very $10 of penalties). Local governments would receive an increasing portion of the increased penalty from 30% in the first two years to 75% from the fourth year.

Discussion

Proponents argue that the DNA database is a useful way to identify criminals as well as exonerate the innocent. They note that Virginia uses a similar database (but larger) and has a larger number of convictions despite being a smaller state.

Opponents warn that Proposition 69 threatens individuals’ privacy. They note that Proposition 69 would require DNA collection for those arrested and charged with crimes (but not convicted). Opponents also note that over 50,000 people are arrested but are not criminally charged. They also caution that the use of the database could, in the future, be used in other ways.

However, Proposition 69 allows those arrested but acquitted or not convicted to petition the court to have their DNA and corresponding reports removed from the DNA databank.

Vision Alignment

Support of Proposition 67 furthers the County’s commitment to ensure basic health and safety for all and supports Goal #7 to maintain and enhance the public safety for all residents and visitors.

Fiscal Impact

While the cost to local governments could be significant, the offset of increased revenues would compensate for the increased costs.

E.

Proposition 72, Health Care Coverage Requirements

Recommendation

Adopt a resolution in support of Proposition 72, Health Care Coverage Requirements.

Background

A vote in support of Proposition 72 would require large (200 or more employees starting in 2006) and medium (50-199 employees starting in 2007) employers to pay at least 80% of the health care coverage costs for employees. Employers may pay for health care coverage directly or through the medical insurance board.

Proposition 72 is a referendum on SB 2 (Burton, 2003) which was scheduled to take effect in 2004. Due to this proposition, it will not take effect unless voters approve the proposition. If Proposition 72 is approved more than 1 million uninsured employees and dependents would receive health coverage.

Employers would be required to “pay or play.” That is, employers can “play” by contracting directly with health insurance providers to ensure coverage for their employees or they can “pay” a fee to the state to provide such coverage for their employers. While the typical focus of the bill is on private businesses, it would also apply to state government, counties, cities, special districts, and school districts.

Discussion

According to the LAO, approximately 6.3 million non-elderly Californians lacked health care coverage for at least some time during the 2001 survey year. These individuals are likely to receive medical assistance from county indigent health care programs. In San Mateo County, the San Mateo Medical Center provides the clear majority of services to the uninsured. The LAO states that “ of the non-elderly uninsured individuals, more than four out of five are either employed or are family members of someone who is working.”

San Mateo County, as an employer, would be required to comply with the requirements of SB 2. While the County provides health care coverage for full-time and part-time employees, SB 2 would require the County to provide care to individuals who are not currently covered. They primarily would include extra help personnel who currently work more than 100 hours per month. According to EPS, the County has 921 extra help employees of which approximately 534 work more than 100 hours a month.

The fiscal impact to provide such additional coverage is unknown. Employee and Public Services conservatively estimates the additional insurance costs to be $2.2 million. However a number of factors can increase and decrease the fiscal impact.

SB 2 and Proposition 72 do not specify the level of health care benefits. As a result estimating costs can be a challenge. Assuming the County offered Kaiser and all eligible employees participated at the employee-only level, the annual cost would be approximately $2.2 million. According to EPS, this amount could be altered by several factors including:

• Election of employee plus 1 or family coverage (whether in the County’s plans or some other, specially designed plan) would increase overall cost,

• Mandated benefits for extra help employees would be superior to the current premium contribution strategy used for permanent part time employees (e.g. part-time employees pay more than 20% for their coverage).

• Participation in the State Health Purchasing Program (SHPP) as an alternative to the County’s health care

• Creation of a newly designed plan which meets Proposition requirements may have a different cost than indicated above.

• The cost of the Government Accounting Standards Board requirement that employees “book” at minimum of 1/30th of the total actuarial liability for all employees. The addition of extra help employees would impact the actuarial liability and therefore the additional annual cost.

The cost benefits and impacts to the San Mateo Medical Center are equally unclear. SMMC staff note that significant numbers of San Mateo County’s uninsureds rely upon SMMC services are employed, some working more than one job. This would suggest that Proposition 72 might cover them and reduce the insured costs to SMMC. However, employees could also move from Med-Cal to SB 2 mandated insurance. This shift would cause a loss in Medi-Cal reimbursements and other reimbursements that rely upon Medi-Cal days of enrollment as part of the funding allocation.

Vision Alignment

Support of Proposition 72 furthers the County’s commitment to ensure basic health and safety for all and supports Goal #5 that residents have access to healthcare and preventative care.

Fiscal Impact

Unknown—potentially significant costs associated with the County’s compliance with the requirements. Staff estimate a possible impact of $2.2 million in additional costs annually. Offset costs from reduced numbers of uninsured accessing SMMC services are unknown.

F.

S. 2706 (Clinton), Kinship Caregiver Support Act

Recommendation

Adopt a resolution in support of S. 2706 (Clinton), Kinship Caregiver Support Act

Background

S. 2706 would create the Kinship Navigator Program, Kinship Guardianship Assistance Program and require relatives are noticed when children enter foster care. S. 2706 would provide help to grandparents and other non-parent relatives who care for children by linking relatives to services for children, providing financial assistance to states for subsidized guardianship programs and requiring notification to grandparents and other relatives when children enter the foster care system.

The Kinship Navigator Program would provide grandparents and other relatives education and assistance to access existing services. According to proponents, accessing services (many for which they are likely eligible) is a significant challenge. The navigator program funds would connect caregivers to services through hotlines, information guides and kinship care service providers.

The Kinship Guardianship Assistance Program (KinGAP) would allow states to use federal funds for subsidized guardianship payments to caregivers rather than for foster care. However, the child must otherwise be eligible for foster care payments. California is one of 34 states that already utilize this program.

S. 2706 would also require child welfare agencies, like the County, to notify all grandparents and other eligible relatives that a child has/is being removed from the parent’s custody.

Discussion

According to the author, over 6 million children live in households headed by grandparents or other relatives. She argues that this trend has increased in the past 20 years.

It is generally agreed that children are traumatized less by living with a relative rather than with strangers from the foster care field. The act’s purpose is to help kinship caregivers (relatives who care for children) and thereby reduce the number of children entering the traditional foster care system. The act would provide information and assistance to kinship caregivers in their efforts to access existing services such as enrolling children in schools, health and mental health care, TANF aid and subsidized child care and early education services.

At least half of all funds would be dedicated to states. The bill appropriates $25 million in fiscal year 2005 with no match requirement, $50 million in fiscal year 2006 with a match requirement up to 25%, and $75 million in fiscal year 2007 with a match requirement up to 50%. At least half of the match must be in cash with the difference in in-kind services.

Vision Alignment

Support of S. 2706 furthers the County’s commitment to ensure basic health and safety for all and would support Goals #6, that children grow up healthy in safe and supportive homes and neighborhoods.

Fiscal Impact

Unknown. But would create the opportunity to secure new grant funding.