BILL ANALYSIS
AB 791
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Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 791 (Swanson) - As Amended: May 6, 2009
Policy Committee: Education
Vote:7-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires the Superintendent of Public Instruction
(SPI) to return authority for each operational area the Fiscal
Crisis and Management Assistance Team (FCMAT), via its progress
reports, recommends be returned to the governing board of
Oakland Unified School District (OUSD) on July 1 of each year.
Specifically, this bill:
1)Expresses legislative intent that state administrator,
appointed by the SPI, and OUSD's governing board begin the
process of an orderly return of authority over the operational
areas of pupil achievement and financial management from the
SPI back to OUSD.
2)Defines "operational areas" as community relations,
governance, pupil achievement, personnel management,
facilities management, and financial management.
3)Authorizes the SPI to require the authority over the
operational area or areas to be returned to, or retained by,
the state administrator, if FCMAT recommends (in its most
recent progress report) that the administrator retain this
authority.
4)Requires the members of OUSD's governing board to be entitled
to receive the full compensation of services that they would
have received prior to state receivership, once authority for
one or more operational area is returned to the district.
FISCAL EFFECT
AB 791
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1)When a school district receives an emergency apportionment,
the district agrees to pay for FCMAT's costs to provide
progress reports to the state. This bill requires these
progress reports to be the basis for SPI to return authority
for specified operational areas to OUSD.
2)SB 39 (Perata), Chapter 14, Statutes of 2003 appropriated $100
million for an emergency loan to OUSD. The district's annual
payment is approximately $6 million. The outstanding balance
is approximately $87.3 million. The loan was issued on June 4,
2003 and it is expected to be paid off by June 5, 2026.
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
FCMAT's reports. The reports are based on OUSD's improvement
in the "operational areas" of community relations/governance,
pupil achievement, personnel management, facilities
management, and fiscal control.
To date, the SPI has returned three "operational areas" to the
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OUSD: community relations/governance, personnel management,
and facilities management. In its December 2008 progress
report, FCMAT found the district has made satisfactory
performance in the areas of pupil achievement and financial
management. As a result, FCMAT recommended the return of
these functions to the OUSD governing board. To date, the SPI
(via the state administrator) has not acted on this
recommendation and returned governing rights of these
operational areas to the OUSD board. This bill requires the
SPI to return authority over the operational areas or areas
that FCMAT recommends, via its progress reports, be returned
to the OUSD governing board.
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 or through additional authority provided in
the annual budget act.
3)Related legislation .
a) AB 980 (Swanson), pending on the Assembly floor,
requires a charter school located within the geographic
boundaries of a school district that is repaying an
emergency loan to pay a prorated amount of the annual
payment made by the district on the loan.
b) AB 1377 (Swanson), pending in this committee, requires
the SPI to allow a school district under receivership
(where a trustee has been appointed and a financial audit
is conducted) a period of 180 days from the date upon which
the final audit report is received to implement corrections
before the district is required to repay or to pay a
penalty arising from an audit finding, as specified.
c) AB 45, similar to this measure, was vetoed in October
2007 with the following message:
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"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 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 : Kimberly Rodriguez / APPR. / (916)
319-2081