BILL ANALYSIS Ó AB 2278 Page 1 Date of Hearing: April 18, 2012 ASSEMBLY COMMITTEE ON EDUCATION Julia Brownley, Chair AB 2278 (Swanson) - As Introduced: February 24, 2012 SUBJECT : School districts: state administrators SUMMARY : Authorizes a school district with a state-appointed administrator to annually evaluate that administrator for the duration of the administratorship, and requires any such evaluation to be submitted to the Governor, the Legislature, the Superintendent of Public Instruction (SPI), and the County Office Fiscal Crisis and Management Assistance Team (FCMAT). EXISTING LAW provides for emergency loans to school districts that are unable to meet their current operating expenses. Such loans are provided by legislation enacted at the request of the district. Existing law requires districts that request and agree to receive an emergency loan to agree to statutory terms and conditions regarding repayment of the loan and the steps to be taken to return the district to financial solvency. If a district receives an emergency loan of up to 200% of its recommended budget reserve, then the Superintendent of Public Instruction (SPI) is required to appoint a trustee who has the authority to stay and rescind any action of the district governing board and who serves until the loan is repaid and the district has adequate fiscal systems and controls in place. If a district receives an emergency loan of more than 200% of its recommended budget reserve, then the SPI is required to assume all legal rights, duties, and powers of the governing board and to appoint an administrator to act on his or her behalf in exercising this authority. The administrator serves under the direction and supervision of the SPI until terminated by the SPI at his or her discretion and after consulting with the county superintendent of schools. The administrator is authorized to do all of the following: 1)Implement substantial changes in the fiscal policies and practices of the district. 2)Revise the educational programs of the district to reflect realistic income projections and pupil performance relative to state standards. 3)Encourage all members of the school community to accept a fair AB 2278 Page 2 share of the burden of the fiscal recovery. 4)Consult with the district's governing board, the exclusive representatives of its employees, parents, and the community. 5)Consult with and seek recommendations from the SPI, FCMAT, and the county superintendent of schools. 6)Enter into agreements on behalf of the district, subject to the approval of the SPI, and change any existing district rules, regulations, policies, or practices as necessary for the effective implementation of the district's recovery plans. The authority of the SPI and administrator continue until all of the following occur: 1)The administrator determines, after one year has elapsed since the district accepted the emergency loan, that future compliance by the district with the recovery plans is probable. 2)The SPI has approved all of the recovery plans and has completed at least two reports identifying the district's progress in implementing the plans. 3)The administrator certifies that all necessary collective bargaining agreements have been negotiated and ratified and that they are consistent with the terms of the recovery plans. 4)The district has completed all reports required by the SPI and the administrator. 5)The SPI determines that future compliance by the district with the recovery plans is probable. All costs of the administrator and other related oversight and monitoring activities are borne by the district. FISCAL EFFECT : This bill is keyed nonfiscal. COMMENTS : When a district receives an emergency loan in excess of 200% of its recommended reserve, the SPI, through an appointed administrator, assumes all legal rights, duties, and powers of the governing board. This can lead to a sense of alienation and disenfranchisement among the community that elected the board and discourage qualified members of the community from wanting to serve on the board. Yet, an important part of restoring the district to fiscal solvency is strengthening community relations and engagement. In some cases, there can be a lack of trust between the community and the "outside" state administrator. Allowing the locally-elected governing board to conduct a formal evaluation of the AB 2278 Page 3 administrator can be a way of holding the administrator accountable to the local community and fostering positive community engagement. REGISTERED SUPPORT / OPPOSITION : Support None received Opposition None received Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087