BILL NUMBER: AB 1908 CHAPTERED 09/30/08 CHAPTER 634 FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2008 APPROVED BY GOVERNOR SEPTEMBER 30, 2008 PASSED THE SENATE AUGUST 18, 2008 PASSED THE ASSEMBLY AUGUST 19, 2008 AMENDED IN SENATE AUGUST 13, 2008 AMENDED IN SENATE JULY 3, 2008 AMENDED IN ASSEMBLY APRIL 23, 2008 AMENDED IN ASSEMBLY APRIL 9, 2008 AMENDED IN ASSEMBLY MARCH 24, 2008 INTRODUCED BY Assembly Member Wolk FEBRUARY 7, 2008 An act to add and repeal Section 41003.3 of the Education Code, relating to the Dixon Unified School District, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 1908, Wolk. Dixon Unified School District: school farm property. Existing law establishes the public school system in this state, and, among other things, provides for the establishment of school districts throughout the state and for their provision of instruction at the public elementary and secondary schools they operate and maintain. Existing law establishes a public school funding system that includes, among other elements, the provision of funding to local educational agencies through state apportionments, the proceeds of property taxes collected at the local level, and other sources. Existing law authorizes school districts to sell surplus real and personal property, as specified. Existing law requires the proceeds obtained by a school district pursuant to the sale of its real property to be expended solely for capital outlay purposes. This bill would express findings and declarations relating to the financial condition of the Dixon Unified School District. The bill would authorize the Dixon Unified School District to sell its excess farmland previously used as the school farm, as specified, and would require the district to deposit the proceeds of the sale into the general fund of the school district to establish a specified reserve and to deposit the remaining amount into the capital outlay fund of the district. The bill would specify the conditions under which the proceeds from the sale authorized by the bill may be expended. The bill would provide that from July 1, 2008, to June 30, 2010, inclusive, the Dixon Unified School District would not be eligible to receive financial hardship assistance pursuant to a specified statute, and that the district would not be eligible to receive hardship funding from the State School Deferred Maintenance Fund under a specified statute until all remaining funds from the sale of the property authorized by the bill are exhausted for deferred maintenance or capital outlay purposes. These provisions would be repealed on January 1, 2021. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. (a) The Legislature hereby finds and declares all of the following: (1) The Dixon Unified School District is facing a projected one million six hundred eight thousand sixty-five dollar ($1,608,065) budget shortfall for the 2008-09 school year. (2) The district, as a result of its budget crisis, has received a negative certification from the Solano County Office of Education. (3) The district is in such financial difficulty that it could not afford to hire a superintendent, and the county superintendent has been serving as interim superintendent of the district. (4) The district will be eliminating home-to-school transportation, except transportation for special education pupils. (5) The district will be closing Silveyville Elementary, where 397 pupils are currently enrolled, and merging those pupils with pupils at Anderson Elementary, a school located miles away from Silveyville. (6) The district has substantially reduced support staff pay, reducing it by almost five hundred thousand dollars ($500,000). (7) The district has substantially reduced secondary school staff pay, reducing it by more than four hundred thousand dollars ($400,000). (8) The district has substantially reduced elementary site staff pay, reducing it by more than two hundred seventy-five thousand dollars ($275,000). (9) The district has reduced funding for programs, including athletics, music, and reading intervention. (10) The district has reduced its budget by more than one million three hundred seventy thousand dollars ($1,370,000) from staff and maintenance reductions. (11) The district has a new high school that includes a 40-acre farm attached to the high school property. (12) The district currently has two empty schoolsites that previously shut down because of declining enrollment that will be available for growth, if necessary, in the future. (13) The Dixon Unified School District is in extreme financial crisis, and has exhausted all of its available options. (b) It is the intent of the Legislature to give the Dixon Unified School District the authority to sell its excess farmland previously used as the school farm, located five miles outside of the city and which is not feasible for future school construction, to pay for reestablishing a 3-percent reserve in order to stay out of receivership. SEC. 2. Section 41003.3 is added to the Education Code, to read: 41003.3. (a) Consistent with the provisions of Article 4 (commencing with Section 17455) of Chapter 4 of Part 10.5 of Division 1 of Title 1, from July 1, 2008, to June 30, 2010, inclusive, the Dixon Unified School District may sell surplus real property previously used as the school farm on Sievers Road, located five miles outside of the city and which is not feasible for future school construction, together with any personal property located thereon, purchased entirely with local funds. The proceeds of the sale shall be deposited into the general fund of the school district in order to reestablish a 3-percent reserve. The remainder of the proceeds from the sale of the property that are not utilized to reestablish the 3-percent reserve shall be deposited into the capital outlay fund of the school district. (b) In order to expend funds pursuant to subdivision (a), the district shall meet all of the following conditions: (1) The district shall not be eligible for new construction funding for 10 years from the date that funds are deposited into the general fund of the school district pursuant to subdivision (a), except that the district may apply for new construction funds if both of the following conditions are met: (A) At least five years have elapsed since the date upon which the sale was executed pursuant to subdivision (a). (B) The State Allocation Board determines that the district has demonstrated enrollment growth or a need for additional sites or building construction that the district could not have easily anticipated at the time the sale was executed pursuant to subdivision (a). (2) The district governing board shall complete a governance training program focusing on fiscal management provided by the County Office Fiscal Crisis and Management Assistance Team (FCMAT). (3) Any remaining funds from the sale of the property shall be exhausted for capital outlay purposes prior to any request for modernization funding. (4) Notwithstanding any other provision of law, the Dixon Unified School District, from July 1, 2008, to June 30, 2010, inclusive, shall not be eligible to receive financial hardship assistance pursuant to Article 8 (commencing with Section 17075.10) of Chapter 12.5 of Part 10 of Division 1 of Title 1. (5) The district shall not be eligible to receive hardship funding from the State School Deferred Maintenance Fund pursuant to Section 17587 until all remaining funds from the sale of the property identified in, and pursuant to, subdivision (a) are exhausted for deferred maintenance or capital outlay purposes. (6) The governing board of the district shall certify all of the following to the State Allocation Board: (A) The district has no major deferred maintenance requirements that cannot be completed with existing capital outlay resources. (B) The sale of the real property pursuant to this section does not violate any provisions of a local general obligation bond act. (C) The real property sold pursuant to this section is not suitable to meet any projected school construction need for the next 10 years. (7) Before exercising the authority granted by this section, the governing board of the district, at a regularly scheduled meeting of that board, shall present a plan for expending one-time resources pursuant to this section. The plan shall identify the source and use of the funds, and describe how the proposed use of funds, in combination with budget reductions, will address the district's deficit spending and restore the ongoing fiscal solvency of the district. (8) No later than 10 years after the date of the sale of surplus property pursuant to subdivision (a), the district shall deposit into its capital outlay fund an amount equal to the amount of the proceeds from the sale of the property that is deposited into the district's general fund as needed to establish the 3-percent reserve in accordance with subdivision (a). (c) This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date. SEC. 3. The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the financial circumstances of the Dixon Unified School District. SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to provide fiscal relief to the Dixon Unified School District during the 2008-09 fiscal year and subsequent fiscal years, it is necessary that this act take effect immediately.