BILL ANALYSIS
AB 45
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Date of Hearing: May 16, 2007
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
AB 45 (Swanson) - As Amended: May 2, 2007
Policy Committee: EducationVote:7-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill establishes a process for returning rights, duties,
and legal powers from the Superintendent of Public Instruction
(SPI) to the governing board of the Oakland Unified School
District (OUSD), as specified. Specifically, this bill:
1)Defines "operational areas" as community relations/governance,
pupil achievement, personnel management, facilities
management, and fiscal control.
2)Requires the County Office Fiscal Crisis and Management Team
(FCMAT), on or before March 1 of each year (beginning in
2008), to prepare and submit a report to the Legislature, the
SPI, and the OUSD governing board on the district's assessment
and recovery plan.
3)Requires the OUSD governing board and the state administrator,
on or before April 1 of each year (beginning in 2008), to
agree on the details of returning authority for any
operational areas recommended for return to the school
district by FCMAT (in the most recent report), as specified.
4)Requires the SPI to return authority to the OUSD governing
board for an operational area in which the annual FCMAT
progress report recommends that it be returned. This bill
requires the return of this area to occur by July 1 of the
year that the report was submitted. This measure further
requires the state administrator to retain authority over
those operational areas that are not recommended to be
returned to the OUSD, as specified.
5)Requires the OUSD governing board to receive full compensation
AB 45
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for services related to one or more operational areas being
returned to them, as specified.
FISCAL EFFECT
1)This bill appropriates $145,000 from the GF/98 to FCMAT for
additional costs associated with completing progress reports.
However, costs incurred by FCMAT are likely to be between
$150,000 and $160,000 to complete these requirements.
2)SB 39 (Perata), Chapter 14, Statutes of 2003 appropriated $100
million for an emergency loan to OUSD. However, it was
determined that OUSD needed only $65 million. The annual
payment of $3.9 million (1.778% interest rate) is due in June.
The outstanding balance is approximately $59.5 million. The
loan was issued on June 4, 2003 and it is expected to be paid
off by June 5, 2023.
COMMENTS
1)Background . Due to school districts becoming financially
insolvent, the state developed a process (AB 1200, Chapter
1213, Statutes of 1991) that outlined the duties and
responsibilities of both the state and school districts when
emergency loans need to be granted to districts. The process
provides that if the state makes a loan to a school district
the SPI shall assume all legal rights, duties, and powers of
the governing board of the school district. The SPI may
appoint an administrator to act on his or her behalf in
exercising specified authority over the district and may, on a
short-term basis, assign any staff necessary to assist the
administrator.
SB 39 (Perata), Chapter 14, Statutes of 2003, appropriated
$100 million for an emergency loan to OUSD and required the
SPI to assume all legal rights and duties of the district. It
also required FCMAT to prepare an improvement plan for the
school district by July 1, 2003 and to report on the
implementation of the plan in written progress reports until
September 2004. Subsequent budget actions extended the
submission of reports until September of 2006.
Chapter 14 also specified six conditions that OUSD must meet
in order to trigger return of powers and duties from the SPI
to the governing board. These conditions are evaluated via
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FCMAT's reports. The reports are based on OUSD's improvement
in the areas of community relations/governance, pupil
achievement, personnel management, facilities management, and
fiscal control.
In September 2005, FCMAT found the district to have made
satisfactory performance in the area of community
relations/governance and recommended the return of this
function to the OUSD board. A subsequent review (report issued
September 2006) yielded the same findings and recommendation.
To date, the SPI (via the state administrator) has not acted
on this recommendation and given governing rights of this
operational area back to the OUSD board.
This bill establishes a process, including specified
timelines, for return of operational areas under the authority
of the OUSD governing board, as specified.
2)FCMAT , housed in the Kern County Office of Education, provides
financial and management assistance to school districts that
request their assistance. In particular, it provides
assistance to those school districts with negative or
qualified financial certifications.
Legislation appropriating emergency state loans to school
districts requires the preparation of annual written status
reports for assessing the progress of schools districts in
meeting their improvement plans. These reports are prepared
by FCMAT for a two-year period through funds provided in
emergency loan legislation for each district. There is no
process for funding these reports in subsequent years, if
progress reports continue to be needed.
The 2006 Budget Act authorized FCMAT to utilize any unexpended
funds available from prior years to fund additional annual
written progress reports for OUSD, the West Fresno Elementary
School District and the Vallejo Unified School district. The
proposed budget does not propose to continue this authority
for FCMAT in 2007-08.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081