BILL ANALYSIS Ó SENATE COMMITTEE ON EDUCATION Alan Lowenthal, Chair 2011-2012 Regular Session BILL NO: AB 2278 AUTHOR: Swanson INTRODUCED: February 24, 2012 FISCAL COMM: No HEARING DATE: June 13, 2012 URGENCY: No CONSULTANT:Daniel Alvarez SUBJECT : School districts: state administrators. SUMMARY This bill permits a school district with a state-appointed administrator to annually evaluate that administrator and requires the 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). BACKGROUND Existing law establishes a process for state oversight and financial assistance for schools in financial trouble, and authorizes the governing board of a school district that determines that its revenues are insufficient to meet its current year obligations to request an emergency apportionment (loan) from the state through the SPI. Further, existing law, requires that acceptance of an emergency apportionment (loan) constitutes agreement by the school district to specified conditions, including the following: The SPI assumes all the legal rights, duties, and powers of the governing board of the district. An audit, for the fiscal year in which the emergency apportionments are disbursed and each year thereafter, is to be conducted of the books and accounts of the district, in lieu of the required annual school district audit; this audit may be conducted by the State Controller's Office (SCO), or an auditor selected by the school district and approved by the SCO. AB 2278 Page 2 The SPI may appoint an administrator to act on behalf of the SPI. The school district governing board becomes advisory only. All costs of the administrator and other related oversight and monitoring activities are borne by the district. The authority of the SPI and the state-appointed administrator continues until specified conditions have been met, including SPI determination that future compliance with recovery plans is probable. (Education Code § 41320, et. seq.) ANALYSIS This bill permits a school district with a state-appointed administrator to annually evaluate that administrator, 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). STAFF COMMENTS 1) Need for the bill . According to the author, this measure will ensure that a local school district governing boards have the opportunity to give feedback on the performance of an appointed state administrator when the school district is under state receivership. The school district governing board, despite its loss of legal authority, is still responsible to the community and remains involved in the school district. 2) Additional background on appointed administrators . As previously stated, the SPI may appoint an administrator to act on his/her behalf. 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: a) Implement substantial changes in the fiscal policies and practices of the district. AB 2278 Page 3 b) Revise the educational programs of the district to reflect realistic income projections and pupil performance relative to state standards. c) Encourage all members of the school community to accept a fair share of the burden of the fiscal recovery. d) Consult with the district's governing board, the exclusive representatives of its employees, parents, and the community. e) Consult with and seek recommendations from the SPI, FCMAT, and the county superintendent of schools. f) 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 the state-appointed administrator continues until specified conditions have been met, including SPI determination that future compliance with recovery plans is probable. The authority of the SPI and administrator continue until all of the following occur: a) 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. b) The SPI has approved all specified recovery plans and has completed at least two reports identifying the district's progress in implementing the plans. c) 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. AB 2278 Page 4 d) The district has completed all reports required by the SPI and the administrator. e) The SPI determines that future compliance by the district with the recovery plans is probable. 1) Is an evaluation of a state administrator truly necessary? The necessity of accepting an emergency apportionment and therefore, the appointment of a state administrator generally is the result of poor local district leadership and decision making and ineffective governance, typically over multiple years. If not corrected, past management decisions can lead to cash insolvency and the need for state intervention in order to ensure a school district is able to maintain an educational program. Therefore, it is not entirely clear why a governance body that may have led to the fiscal distress of a school district is in the best position to evaluate an appointed administrator brought in for the sole purpose of restoring the financial solvency and maintaining the educational program of the district. Should the committee wish to move this measure forward, staff recommends amendments as follows: a) Provide that the evaluation is advisory only. b) Provide that an annual advisory evaluation can happen only after one complete fiscal year has elapsed following the qualifying school districts' acceptance of an emergency apportionment. c) An advisory evaluation should focus on a state administrator's effectiveness in leading the district toward fiscal recovery and improved academic achievement. Evaluation criteria shall be agreed upon by the governing board and administrator prior to the evaluation and shall include, but not be limited to, goals and standards consistent with Education Code section 41327.1. The evaluation shall provide commendations in areas of strength and AB 2278 Page 5 achievement; provide recommendations for improving effectiveness in areas of concern and performance. d) A technical amendment in paragraph (e) (1) (A), strike out "loan" and insert: "emergency apportionment" SUPPORT California School Boards Association California Teachers Association OPPOSITION None on file.