BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2278
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          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 








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            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 








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          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