BILL ANALYSIS
AB 45
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 45 (Swanson)
As Amended July 18, 2007
Majority vote
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|ASSEMBLY: |47-32|(June 5, 2007) |SENATE: |29-12|(September 6, |
| | | | | |2007) |
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Original Committee Reference: ED.
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; and, 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.
2)Requires OUSD and the State Administrator appointed by the
Superintendent of Public Instruction (SPI) annually by April 1
to 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; and, requires
that if OUSD and the State Administrator are unable to reach
the agreement specified above, then the SPI shall by May 1
produce a statement in-lieu of that agreement. This statement
stands unless the OUSD governing board by June 1 presents just
cause to the contrary to the Office of Administrative Hearings
(OAH) such that an administrative law judge orders changes in
the statement and execution by both parties of that statement
in-lieu of the agreement.
3)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, excepting that the SPI is also
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required to deem OUSD to be a going concern with no risk of
fiscal distress before the area of fiscal control is returned
to the governing board; and 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.
4)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.
The Senate amendments :
1)Change the burden for producing the statement in-lieu of an
agreement from the OUSD governing board to the SPI if the
parties are unable to reach agreement on the operational
details of returning any areas of responsibility recommended
for return to OUSD, and change the burden of making an appeal
of that statement to the Office of Administrative Hearings
from the SPI to the OUSD governing board.
2)Require that the SPI conclude that OUSD is a going concern
with no risk of reverting to practices that would bring on
fiscal distress requiring the state to provide an emergency
loan before the area of fiscal management is returned to the
OUSD governing board.
EXISTING LAW requires:
1)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, and 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.
2)FCMAT to prepare the improvement plan for the school district
by July 1, 2003.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate, excepting that the roles of
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the parties in the event that they are unable to reach agreement
on the operational details of returning any areas of
responsibility were swapped and an additional condition is
placed by the Senate on the return of fiscal management to the
district.
FISCAL EFFECT : According to the Senate Appropriations
Committee, costs of earlier FCMAT progress reports have been
approximately $150,000 or more, so this bill would create annual
costs of at least that much until the time that all powers have
been restored to the governing board of OUSD. The most recent
version of the proposed 2007-08 Budget includes $385,000 for
reports in Oakland, Vallejo, and West Fresno. Also likely costs
of several thousand dollars each time the OAH mediation process
is triggered.
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 requires 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. This 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 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 progress reports until
September 2004; budget actions subsequently extended these
annual reports until September of 2006. The bill required the
district to repay the 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
issued in September 2006 yielded the same recommendation; in
July 2007 the SPI acted on this recommendation. The State
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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.
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 ($59 million
loan balance on the $100 million appropriated). The OUSD Board
is voluntarily undergoing training in the 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.
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
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 SPI,
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but allows the district to make an appeal of that default
result. 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: 0002852