BILL ANALYSIS
AB 45
Page 1
ASSEMBLY THIRD READING
AB 45 (Swanson)
As Amended June 1, 2007
Majority vote
EDUCATION 7-3 APPROPRIATIONS 12-5
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|Ayes:|Mullin, Brownley, Coto, |Ayes:|Leno, Caballero, Davis, |
| |Eng, Hancock, Karnette, | |DeSaulnier, Huffman, |
| |Solorio | |Karnette, Krekorian, |
| | | |Lieu, Ma, Nava, Solorio, |
| | | |Feuer |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Garrick, Huff, Nakanishi |Nays:|Walters, Emmerson, La |
| | | |Malfa, Nakanishi, Sharon |
| | | |Runner |
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SUMMARY : Establishes a process for the return of rights, duties,
and powers to the governing board of the Oakland Unified School
District (OUSD). Specifically, this bill :
1)Requires the Fiscal Crisis Management Assistance Team (FCMAT),
commencing in 2008 and annually thereafter until all areas of
responsibility are returned, to submit a progress report on
OUSD's Assessment and Recovery Plan by March 1.
2)Requires FCMAT to use the same standards, scoring methodology,
and evaluative threshold as employed in their Fourth Progress
Report on the OUSD Assessment and Recovery Plan to make future
evaluations of the district's progress and recommendations as
to operational areas that should be returned to the control of
the governing board of OUSD.
3)Requires OUSD and the State Administrator appointed by the
Superintendent of Public Instruction (SPI) annually by April 1
reach agreement on the operational details of returning any
areas of responsibility recommended for return to OUSD in the
previous progress report submitted by FCMAT.
4)Requires that if OUSD and the State Administrator are unable
to reach the agreement specified above, then the OUSD
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governing board shall by May 1 produce a statement in-lieu
that agreement. This statement stands unless the SPI by June 1
presents just cause to the contrary to the Office of
Administrative Hearings such that an administrative law judge
orders changes in the statement and execution by both parties
of that statement in-lieu of the agreement.
5)Requires that any areas of responsibility recommended for
return to OUSD by FCMAT in the annual progress report become
part of the rights, duties, and powers of the governing board
of OUSD on the next July 1.
6)Allows members of the governing board of OUSD to draw
compensation for their service at any time during which this
process returns any area of responsibility to OUSD; such
compensation shall be made in the same manner and amount as
was allowed prior to state takeover.
7)Requires that any area of responsibility previously returned
to OUSD be reverted to the control of the State Administrator
upon such recommendation by FCMAT in its annual progress
report.
EXISTING LAW :
1)Requires the SPI to assume all the rights, duties, and powers
of the governing board of the OUSD and to appoint an
administrator to act on behalf of the SPI in exercising the
authority of the SPI over the school district.
2)Continues the authority of the SPI and the administrator over
the school district until certain enumerated conditions in the
judgment of the SPI are met, including the completion of an
improvement plan for the district.
3)Requires FCMAT to prepare the improvement plan for the school
district by July 1, 2003.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)$150,000 from General Fund Proposition 98 is proposed to be
appropriated in the Budget Act of 2007 to FCMAT for additional
costs associated with completing progress reports. However,
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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, appropriates
$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 : Despite making budget cuts in fiscal year 2002-03,
OUSD continued to project a negative fund balance at the close
of that year; OUSD requested an emergency loan. SB 39 (Perata),
Chapter 14, Statutes of 2003, appropriates $100 million for an
emergency loan to OUSD, and required the SPI to assume all the
rights, duties, and powers of the governing board of the
district and to appoint an administrator to act on behalf of the
SPI in exercising authority over the school district. The bill
authorized the administrator, with the approval of the SPI, to
enter into agreements on behalf of the school district and to
change any existing district rules, policies, or practices, as
provided. The bill also specified that the governing board of
the school district not receive any compensation during the
period of the SPI's authority over the district, and continued
the authority of the SPI and the administrator over the school
district until certain conditions were met, including the
completion of an improvement plan for the district. The bill
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;
budget actions subsequently extended these reports annually
until September of 2006. The bill required the district to
repay the loan as a straight line loan amortized over a 20-year
term, with interest as provided, and required the district,
except as specified, to bear 100% of all costs associated with
implementing its provisions.
In September 2005, FCMAT found the district to be above the
evaluative threshold marking satisfactory performance in the
area of Community Relations and 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. The SPI and the State Administrator have not
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acted on this recommendation. The State Administrator has
stated that she expects the district to be above the evaluative
threshold marking satisfactory performance in all areas, except
Financial Management, in the next year.
Existing law provides no specific criteria to be used to
determine when the district's future compliance with the
improvement plan and the recovery plan is probable, and thus
when the SPI should return control to OUSD; it also provides no
direct evaluative link between this determination and the
reviews completed by FCMAT. Having no clear statutory criteria
for return of control could lead to results ranging from a
premature return of control, which is not in the students' or
the state's best interest, to an overly prolonged period of SPI
/ State Administrator control, which may not be in the best
interest of any party; in addition, either of these extreme
results could occur despite FCMAT recommendations to the
contrary. The author and members of the Oakland community state
that the ambiguity and open-ended nature of this decision
process and of OUSD's current situation makes it difficult to
motivate students, parents, staff, and the community at large to
continue work toward improvement in the district. The OUSD
Board is voluntarily undergoing training in Boardsmanship and
responsibilities of a Board; this training began in January
2007, will continue in April, and be completed in June 2007;
there has been a complete turnover in board membership since
2003.
There is a considerable state's interest in this issue, in that
a return to dysfunction in the district (either because the
district is not yet ready for a return of control or because the
district "backslides" once control is returned) should be the
paramount concern, both because of the resulting impact on
students and the state's outstanding receivable, the balance on
the $100 million loan.
Supporters of the bill argue that having a set of performance
evaluations conducted by an independent expert on a certain
timeline, where positive evaluations trigger the return of
specific areas of responsibility to the OUSD Board meets the
needs of the OUSD Board and the Oakland community for a defined,
unambiguous return process. They argue that this bill also
includes a mechanism for dealing with the possible disagreements
and ambiguities between the district and the State Administrator
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that might result from returning areas that are not clearly
defined as to what specific responsibilities are held by which
party; this mechanism has a default in the interest of the
district, but allows the Superintendent to present arguments
against return of control. The fact that return of control, as
well as potential reversion of control to the State
Administrator, is triggered by an evaluation of performance
ensures that an external evaluator determines when the district
is ready for those responsibilities and protects the interests
of the state. It can also be argued that returning control to a
school district, when an independent entity determines that the
school district can handle the return of that control,
constitutes a return of local control and makes the controlling
entity more responsive to the needs of the local community.
Analysis Prepared by : Gerald Shelton / ED. / (916) 319-2087
FN: 0001284