BILL ANALYSIS
AB 45
Page 1
GOVERNOR'S VETO
AB 45 (Swanson)
As Amended July 18, 2007
2/3 vote
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|ASSEMBLY: |47-32|(June 5, 2007) |SENATE: |29-12|(September 6, |
| | | | | |2007) |
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|ASSEMBLY: |47-31|(September 10, | | | |
| | |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
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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 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
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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 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
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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 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
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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, 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
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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.
GOVERNOR'S VETO MESSAGE :
I support returning local governance to the
Oakland Unified School District when it is
appropriate to do so. To date, the emergency
loan to Oakland Unified has been the largest to a
school district in the state and has been under
the control of the Superintendent of Public
Instruction (SPI). While the reports produced by
the Fiscal Crisis Management and Assistance Team
are valuable tools, they provide only a snapshot
of the district at a particular point in time.
Furthermore, I am concerned that the Office of
Administrative Hearings will not be in a position
to make decisions related to the day to day
management of the school district, as these
matters are generally not a matter of law, but a
matter of overall educational benefit.
As such, I am concerned with the process for
determining return of local control, as proposed
in this bill. The pace at which it seeks to
restore the authority of the school board may
surpass the pace at which the state administrator
can imbed sustainable reforms. Current law
contemplates the return of the district to local
control once the SPI has a level of confidence
that the improvements in the district are
sustainable. In the interest of the educational
well being of the students, it is well worth
investing the time to allow the SPI to finish the
work that has already begun.
Analysis Prepared by : Gerald Shelton / ED. / (916)
319-2087
AB 45
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FN: 0003607