BILL NUMBER: SB 130 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 13, 2009
INTRODUCED BY Senator Denham
( Coauthor: Assembly Member
Caballero )
FEBRUARY 9, 2009
An act relating to the King City Joint Union High School District,
making an appropriation therefor, and declaring the urgency thereof,
to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 130, as amended, Denham. King City Joint Union High School
District.
(1) Existing law provides for emergency apportionments to school
districts subject to specified conditions including, in certain
circumstances, the repayment of an emergency loan over a period of no
more than 10 years and the appointment by the Superintendent of
Public Instruction of an administrator who would exercise the powers
and responsibilities of the governing board of the school district.
This bill would express the intent of the Legislature to
provide emergency apportionment assistance to the King City Joint
Union High School District, and require the Superintendent of
Public Instruction to assume all the rights, duties, and powers of
the governing board of the King City Joint Union High School District
and to appoint, in consultation with the Monterey County
Superintendent of Schools, an a state
administrator to act on behalf of the Superintendent of Public
Instruction in exercising the superintendent's authority over the
school district. The bill would require the administrator to
be deemed an employee of the school district for certain purposes.
The bill would require the governing board of the school district
to serve as an advisory body reporting to the administrator and
prohibit its members from receiving any compensation during the
period of the superintendent's authority over the district. The bill
would authorize the administrator to terminate the employment of
certain district personnel, as provided. The bill would authorize the
administrator, with the approval of the superintendent, to enter
into agreements on behalf of the district and to change any existing
district rules, regulations, policies, or practices, as provided.
The bill would continue the authority of the superintendent and
the state administrator over the school district until
certain enumerated conditions are met, including the completion of
assessment and improvement plans for the school district.
The bill would require the administrator to consider, on
a monthly basis or more frequently if desired, information from one
or more specified groups. The bill would require the County
Office Fiscal Crisis and Management Assistance Team (FCMAT) to
prepare, by November 1, 2009, an improvement plan for the
school district. The bill would require the FCMAT, commencing 30 days
following the effective date of this bill and in January 2010 and at
least every 6 months thereafter, to file a status report with
specified persons on progress made by the district in implementing
the plan provide specified assistance relating to the
development of a multiyear financial recovery plan, the preparation
of budget reports, and the recommendation of activities that could
enhance revenue or achieve cost savings .
The bill would require the school district to bear 100% of
all costs associated with implementing
its the provisions of the bill relating to
the administration of the emergency apportionment assistance and the
activities of the FCMAT , thereby imposing a state-mandated
local program.
The bill would appropriate $10,000,000
$13,000,000 from the General Fund to the Superintendent of
Public Instruction for apportionment as an emergency loan to the King
City Joint Union High School District, and specify procedures for
repayment of the loan. The bill would authorize the school district
to sell property owned by the district and use the proceeds from the
sale to reduce or retire the emergency loan, and would prohibit the
district from being eligible for financial hardship assistance under
the Leroy F. Greene School Facilities Act of 1998.
(2) This bill would make a legislative finding and declaration
that the unique circumstances of the King City Joint Union High
School District warrant the enactment of a special statute.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Providing a quality education that meets the unique needs of
King City public school pupils is a fundamental goal that should not
be jeopardized.
(b) On December 4, 2007, the Monterey County Office of Education
declared the King City Joint Union High School District a "lack of
going concern" and appointed a fiscal advisor to monitor the
operations of the district.
(c) The budget analysis conducted by the county office indicates
that the district is deficit spending, is unable to maintain its
reserve for economic uncertainty, and will have a negative fund
balance for at least the current and two subsequent fiscal years.
(d) The district is facing a fiscal and cash insolvency as a
result of organizational decisionmaking and the loss of an appeal for
a recent Public Employee Relations Board (PERB) ruling that resulted
in increased employee compensation costs and continued deficit
spending.
(e) The district is declining in enrollment, which is further
exacerbating its fiscal circumstances.
(f) The King City Joint Union High School District is projected to
run out of cash to support its routine operations and expenditures
by March 2009, and it will require an emergency appropriation from
the state in order to continue the delivery of educational services
to pupils enrolled in the district.
SEC. 2. It is the intent of the Legislature to
provide emergency appropriation assistance to the King City Joint
Union High School District, and invoke the provisions of Article 2
(commencing with Section 41320) of, and Article 2.5 (commencing with
Section 41325) of, Chapter 3 of Part 24 of Division 3 of Title 2 of
the Education Code, except as otherwise provided in this act, in
order to restore the district to fiscal solvency.
SEC. 3. As provided in subdivision (b) of Section
41326 of the Education Code, the Superintendent of Public Instruction
shall assume all legal rights, duties, and powers of the King City
governing board and shall appoint a state administrator, in
consultation with the county superintendent, to act on his or her
behalf in carrying out the requirements of Article 2 (commencing with
Section 41320) of, and Article 2.5 (commencing with Section 41325)
of, Chapter 3 of Part 24 of Division 3 of Title 2 of the Education
Code. Notwithstanding subdivision (e) of Section 41326 of the
Education Code, the authority of the Superintendent of Public
Instruction and the state administrator shall continue until all of
the following occur:
(a) (1) At any time after one complete fiscal year has elapsed
following the district's acceptance of a loan as described in
subdivision (a) of Section 41326 of the Education Code, the state
administrator determines, and so notifies the Superintendent of
Public Instruction and the county superintendent of schools, that
future compliance by the school district with the recovery plans
approved pursuant to paragraph (2) is probable.
(2) The Superintendent of Public Instruction may return power to
the governing board for any area listed in subdivision (a) of Section
41327.1 of the Education Code, if performance under the recovery
plan for that area has been demonstrated to the satisfaction of the
Superintendent of Public Instruction.
(b) The Superintendent of Public Instruction has approved all of
the recovery plans referred to in subdivision (a) of Section 41327 of
the Education Code, and the County Office Fiscal Crisis and
Management Assistance Team completes the improvement plans specified
in Section 41327.1 of the Education Code and has completed a minimum
of two reports identifying the school district's progress in
implementing the improvement plans.
(c) The state administrator certifies that all necessary
collective bargaining agreements have been negotiated and ratified,
and that the agreements are consistent with the terms of the recovery
plans.
(d) The school district has completed all reports required by the
Superintendent of Public Instruction and the state administrator.
(e) The state administrator certifies that the members of the
school board and district personnel, as appropriate, have
successfully completed the training specified in subdivision (b) of
Section 7 of this act.
(f) The Superintendent of Public Instruction determines that
future compliance by the school district with the recovery plans
approved pursuant to subdivision (b) is probable.
SEC. 2. (a) It is the intent of the Legislature
that the state administrator appointed pursuant to this act work
with the staff
SEC. 4. In addition to the implementation of
subdivision (b) of Section 41325 of the Education Code, it is the
intent of the Legislature that the Superintendent of Public
Instruction, operating through the appointed state administrator, do
all of the following:
(a) Work with the staff and
governing board of the King City Joint Union High School District to
identify the procedures and programs that the district will implement
during the 2008-09 school year and future school years that do all
of the following:
(1) Significantly raise pupil achievement.
(2) Improve pupil attendance.
(3) Lower pupil dropout rate.
(4) Increase parental involvement.
(5) Attract, retain, and train a quality teaching staff.
(6) Manage fiscal expenditures in a manner that is consistent with
the current and projected revenues of the district.
(b) It is the intent of the Legislature that these identified
(b) Analyze the identified
procedures and programs be analyzed by the state
administrator and, where applicable and appropriate,
be protected, maintained, and expanded
protect, maintain, and expand them as the budget of the
district allows. The state administrator shall report any findings
applicable to this section to the Superintendent of Public
Instruction and the education committees of the Legislature.
SEC. 3. The Legislature finds and declares that, because of the
fiscal emergency in which the King City Joint Union High School
District finds itself, it is necessary that the Superintendent of
Public Instruction assume control of the district in order to ensure
the return to the district of fiscal solvency. For this section,
fiscal solvency shall be defined, at a minimum, as follows:
(a) The county superintendent finds that the district, in any
given fiscal year after receipt of the state loan and for at least
two subsequent years, demonstrates that revenues exceed expenditures
in the district's general fund unrestricted budget.
(b) The county superintendent finds that district is able to
maintain the minimum reserve for economic uncertainty for three
consecutive years.
(c) The county superintendent determines that the district's
general fund unrestricted fund balance is positive and has the
potential to increase for three consecutive years.
(d) The county superintendent, after the application of a variety
of criteria, finds that the district certification is at least
qualified.
SEC. 4. (a) The Superintendent of Public Instruction shall
immediately assume all of the rights, duties, and powers of the
governing board of the King City Joint Union High School District.
(b) The Superintendent of Public Instruction, in consultation with
the Monterey County Superintendent of Schools, shall appoint an
administrator to act on behalf of the Superintendent of Public
Instruction in exercising the authority described in this act. The
Superintendent of Public Instruction or the state-appointed
administrator may, on a short-term basis, employ at district expense
any staff necessary to assist the administrator, including, but not
necessarily limited to, a certified public accountant. The
administrator shall have recognized expertise in management and
finance. The administrator shall serve under the direction and
supervision of the Superintendent of Public Instruction until
terminated by the Superintendent of Public Instruction at his or her
discretion. The Superintendent of Public Instruction shall consult
with the Monterey County Superintendent of Schools before terminating
or replacing the administrator. The Superintendent of Public
Instruction, operating through the administrator, may do all of the
following:
(1) Implement substantial changes in the fiscal policies and
practices of the King City Joint Union High School District,
including, if necessary, the filing of a petition under Chapter 9 of
the federal Bankruptcy Act (11 U.S.C. Sec. 901 et seq.) for the
adjustment of indebtedness of the district.
(2) Revise the educational program of the King City Joint Union
High School District to reflect realistic revenue projections, in
response to the dramatic effect of the changes in fiscal policies and
practices upon educational program quality and the potential for the
success of all pupils. To the extent allowed by district finances,
it is the intent of the Legislature that the revised program maintain
the core educational reforms that have led to districtwide
(c) To the extent allowed by district
finances, maintain, under the revised program, core educational
reforms that will lead to districtwide improvement of academic
achievement, including, but not necessarily limited to, educational
reforms targeting underperforming and Program Improvement schools and
other reforms that have demonstrated measurable success.
(3) Encourage all members of the school community to accept a fair
share of the burden of the fiscal recovery of the King City Joint
Union High School District.
(4) Consult, for the purposes described in this act, with the
governing board of the King City Joint Union High School District,
the exclusive representatives of the employees of the district,
parents, and the community.
(5)
(d) Consider for purposes of efficiency and cost
containment an analysis of the unification of the King City Joint
Union High School District with the King City Elementary School
District, any other school district located within the general high
school attendance area, or both.
SEC. 5. (a) (1) To facilitate the appointment of the
state-appointed administrator and the employment of any necessary
staff, for the purposes of this act, the Superintendent of Public
Instruction is exempt from the requirements of Article 6 (commencing
with Section 999) of Chapter 6 of Division 4 of the Military and
Veterans Code and Part 2 (commencing with Section 10100) of the
Public Contract Code.
(2) The Superintendent of Public Instruction shall establish
salary and benefits of the administrator, which shall be paid by the
King City Joint Union High School District.
(3) During the tenure of his or her appointment, the
administrator, if otherwise an employee of the state or of the county
superintendent, is an employee of the school district, but shall
remain in the same retirement system under the same plan that is
provided by his or her employment with the state or the office of the
county superintendent. Upon the expiration or termination of the
appointment, the administrator shall have the right to return to his
or her former position, or to a position at substantially the same
level as that position, if that former position was with the state or
the office of the county superintendent. The time served in the
appointment shall be counted for all purposes as if the administrator
had served that time in his or her former position with the state or
with the office of the county superintendent.
(b) For the period of time during which the Superintendent of
Public Instruction exercises the authority described in subdivision
(a) of Section 4, the governing board of the King City Joint Union
High School District shall serve as an advisory body reporting to the
administrator, but has no rights, duties, or powers, and is not
entitled to nor shall it receive any stipend, benefits, or other
compensation from the district.
(c) Upon appointment of the state administrator, the district
superintendent of schools is no longer an employee of the district.
(d) Notwithstanding any other provision of law, the administrator
may, after according the employee reasonable notice and opportunity
for hearing, terminate the employment of any deputy, associate, or
assistant superintendent of schools, or other person employed in an
equivalent capacity, whose duties include overseeing, managing, or
otherwise directing the fiscal and budgetary operations of the King
City Joint Union High School District, and who is employed by the
King City Joint Union High School District under a contract of
employment renewed after the effective date of this act if the
employee fails to document, to the satisfaction of the administrator,
that before the effective date of this act he or she either advised
the governing board of the district, or his or her superior, that
actions contemplated or taken by the governing board could result in
the fiscal insolvency of the district or took other appropriate
action to avert that fiscal insolvency.
(e) With the approval of the Superintendent of Public Instruction,
the administrator may enter into agreements on behalf of the school
district and, subject to any contractual and statutory obligation of
the school district, change any existing school district rules,
regulations, policies, or practices as necessary for the effective
implementation of the improvement plan specified in Section 7 of this
act.
(f) (1) For the fiscal year in which the apportionments are
disbursed and for each fiscal year thereafter, the County Office
Fiscal Crisis and Management Assistance Team (FCMAT) shall serve as
the independent fiscal advisor to the state administrator as defined
in paragraph (5) of subdivision (e) of Section 42127.6 of the
Education Code. The fiscal advisor shall do all of the following:
(A) Assist the state administrator in the development of the
multiyear financial recovery plan.
(B) Develop and consistently update an independent multiyear
financial projection of the district's budget.
(C) Consult with the state administrator regarding any draw
against the funds contained in the emergency appropriation.
(D) Independently report on the fiscal health of the district at
an interval that is consistent with the 1st and 2nd Interim Reporting
periods as established in the Education Code.
(2) The costs of the advisor shall be paid by the district to the
extent that the advisor's costs exceed the amount appropriated for
the FCMAT pursuant to schedule (9) of Item 6110-485 of Section 2.00
of the annual Budget Act. The fiscal advisor shall remain in place
until the fiscal solvency of the district has been achieved pursuant
to the criteria identified in subdivisions (a) to (d), inclusive, of
Section 3 of this act.
(g) The authority of the Superintendent of Public Instruction and
the administrator pursuant to this act shall continue until all of
the following conditions occur:
(1) Two complete fiscal years have elapsed following the
appointment of the administrator or, at any time after one complete
fiscal year has elapsed following that appointment, if the
administrator determines, and so notifies the Superintendent of
Public Instruction, that future compliance by the King City Joint
Union High School District with the improvement plan specified in
Section 7 of this act is probable.
(2) The FCMAT completes the improvement plan specified in Section
7 of this act.
(3) The FCMAT, after consultation with the administrator,
determines that for at least the immediately previous six months the
school district made substantial and sustained progress in
implementation of the plans in the major functional area.
(4) The administrator certifies that all necessary collective
bargaining agreements have been negotiated and ratified and that the
agreements are consistent with the terms of the improvement plan
specified in Section 7 of this act.
(5) The district completes all reports required by the
Superintendent of Public Instruction and the administrator.
(6) The administrator certifies that the members of the school
board and district personnel, as appropriate, have successfully
completed the training specified in subdivision (b) of Section 7 of
this act.
(7) The Superintendent of Public Instruction concurs with the
assessment of the administrator and the FCMAT that future compliance
by the King City Joint Union High School District with the
improvement plan described in Section 7 of this act and the multiyear
financial recovery plan described in paragraph (2) of subdivision
(a) of Section 41327 of the Education Code is probable.
(h) If all of the conditions specified in subdivision (e) occur,
the governing board of the King City Joint Union High School District
shall regain all of its rights, duties, and powers.
(i) Notwithstanding subdivision (f), if the King City Joint Union
High School District violates any provision of the improvement plan
specified in Section 7 of this act, after the governing board of the
school district regains all of its rights, duties, and powers
pursuant to subdivision (f), the Superintendent of Public Instruction
may reassume, in accordance with this section, all of the rights,
duties, and powers of the governing board of the school district. The
Superintendent of Public Instruction shall subsequently return to
the governing board of the school district all of its rights, duties,
and powers reassumed under this subdivision if he or she determines
that the conditions of subdivision (e) are satisfied.
(j) For the purposes of Article 2 (commencing with Section 41320)
and Article 2.5 (commencing with Section 41325) of Chapter 3 of Part
24 of the Education Code, the administrator is a public school
employer within the meaning of the Educational Employment Relations
Act (Chapter 10.7 (commencing with Section 3540) of Division 4 of
Title 1 of the Government Code).
SEC. 6. (a) The administrator shall consider, on a monthly basis,
or more frequently if so desired by the administrator, information
from one or more groups from each of the following categories:
(1) The governing board of the school district.
(2) Any advisory council of the school district.
(3) Any parent-teacher organization of the school district.
(4) Representatives from the community in which the school
district is located.
(5) The County Office Fiscal Crisis and Management Assistance
Team.
(b) The state appointed administrator shall prepare or obtain the
following reports and plans:
(1) A management review and recovery plan.
(2) A multiyear financial recovery plan. The multiyear financial
recovery plan shall include the development of an initial plan not
later than six months after the district's receipt of any proceeds
from the emergency appropriation. The multiyear financial recovery
plan shall include a plan, updated and submitted thereafter annually
on or before July 1, to repay to the state any and all loans owed by
the district.
SEC. 7. (a) On or before November 1, 2009, the County Office
Fiscal Crisis and Management Assistance Team (FCMAT) shall conduct a
comprehensive assessment and prepare an improvement plan for the King
City Joint Union High School District incorporating the following
five operational areas:
(1) Financial management.
(2) Pupil achievement.
(3) Personnel management.
(4) Facilities management.
(5) Community relations.
(b) The Superintendent of Public Instruction may consider the
comprehensive assessment conducted by the FCMAT to meet the
requirement for the management review and recovery plan identified in
paragraph (1) of subdivision (b) of Section 6 of this act.
SEC. 5. (a) The County Office Fiscal Crisis and
Management Assistance Team (FCMAT) shall, with concurrence from the
Superintendent of Public Instruction, do all of the following:
(1) Provide assistance to the state administrator in the
development of the first annual multiyear financial recovery plan
required under paragraph (2) of subdivision (a) of Section 41327 of
the Education Code.
(2) Provide assistance to the state administrator in the
development of the adopted budget and interim reports.
(3) Recommend to the Superintendent of Public Instruction any
studies or activities that should be undertaken by the state
administrator to enhance revenue or achieve cost savings.
(4) Provide any other assistance as described in Section 42127.8
of the Education Code.
(b) The district shall bear 100 percent of all costs associated
with implementing Article 2.5 (commencing with Section 41325) of
Chapter 3 of Part 24 of Title 2 of the Education Code, including the
activities of the FCMAT. The FCMAT's assistance under this section
shall continue until the district is certified as positive pursuant
to the definition in paragraph (1) of subdivision (a) of Section
42131 of the Education Code, or until all legal rights, duties, and
powers are returned to the board, whichever comes first.
SEC. 6. For the purposes of Article 2 (commencing
with Section 41320) of, and Article 2.5 (commencing with Section
41325) of, Chapter 3 of Part 24 of Division 3 of Title 2 of the
Education Code, the administrator is a public school employer within
the meaning of the Educational Employment Relations Act (Chapter 10.7
(commencing with Section 3540) of Division 4 of Title 1 of the
Government Code).
SEC. 7. (a) The Superintendent of Public
Instruction may consider the comprehensive assessment conducted by
the County Office Fiscal Crisis and Management Assistance Team
(FCMAT) pursuant to Section 41327.1 of the Education Code to meet the
requirements for the management review and recovery plan identified
in paragraph (1) of subdivision (a) of Section 41327.1 of the
Education Code.
(c)
(b) The improvement plan for personnel management
specified in paragraph (3) of subdivision (a) shall include,
but not of Section 41327.1 of the Education Code
shall include, but not necessarily be limited to, the following
training:
(1) Training for members of the governing board of the school
district in the subjects about which members of the governing board
need to have knowledge to effectively discharge their duties as board
members, with specific training in the fiduciary responsibilities of
a governing board member and in the financial management practices
necessary for governing board members to effectively discharge their
duty to oversee and monitor the budget, accounting practices,
revenues, and expenditures of the school district. At a minimum, each
board member shall participate in the Masters In Governance training
provided by the California School Boards Association. The cost for
this training shall be borne by the district.
(2) Training for the superintendent of the school
district and all personnel with management, policymaking,
and advisory responsibilities who report or would report directly to
the superintendent state administrator
, to ensure they have the knowledge and skills to effectively
administer their areas of responsibility consistent with sound fiscal
practices and the budgetary requirements of the school district.
(d) Based upon progress reports prepared pursuant to subdivision
(c), the FCMAT shall recommend to the Superintendent of Public
Instruction those designated functional areas of school district
operation that it determines are appropriate for the governing board
of the school district to assume.
(e) Commencing 30 days following the effective date of this act
and in January 2010, and each six months
thereafter until January 2011, the FCMAT shall
file a written status report with the appropriate fiscal and policy
committees of the Legislature, including any special committees
created for the purpose of reviewing the reports, and with the
Members of the Legislature who represent the King City Joint Union
High School District, the advisory board of the school district, the
Superintendent of Public Instruction, the Director of Finance, and
the Secretary for Education. The reports shall include an updated
multiyear financial projection and analysis of the progress that the
King City Joint Union High School District is making in meeting the
recommendations of the improvement plan developed pursuant to this
section.
(c) Notwithstanding the timelines in subdivision (d) of Section
41327.1 of the Education Code, after the first written status report,
FCMAT shall file subsequent reports annually thereafter as
determined by the Superintendent of Public Instruction.
SEC. 8. (a) The King City Joint Union High
School District shall bear 100 percent of all costs associated with
implementing this act.
(b) The King City Joint Union High School District shall add the
administrator as a covered employee of the school district for all
purposes of errors and omissions liability insurance policies.
SEC. 9. (a) The sum of ten million dollars
($10,000,000) is
SEC. 8. (a) The sum of
thirteen million dollars ($13,000,000) is hereby appropriated
from the General Fund to the Superintendent of Public Instruction for
apportionment to the King City Joint Union High School District for
the purpose of an emergency loan. In order to qualify for the loan,
the district shall comply with Article 2 (commencing with Section
41320) and Article 2.5 (commencing with Section 41325) of Chapter 3
of Part 24 of Division 3 of Title 2 of the Education Code
to the extent those provisions are consistent with the conditions
specified in this act.
(b) Funds may be disbursed from the proceeds of the loan only if
the administrator and the County Office Fiscal Crisis and Management
Assistance Team jointly determine that the disbursement is necessary
to support the immediate cashflow needs of the district.
(c) Based on the needs of the district to meet its obligations,
the Superintendent of Public Instruction may direct the Controller to
disburse, on a monthly basis, specific amounts of the emergency loan
before the approval of all of the conditions established by this
act.
(d) For the fiscal year in which the loan moneys are disbursed and
each fiscal year thereafter, the county superintendent of schools
shall cause an audit to be conducted of the books and accounts of the
district, that is consistent with the audit required by Section
41020 of the Education Code. At the discretion of the county
superintendent, the audit may be conducted by the Controller, or an
auditor selected by the county superintendent and approved
by the Controller from the directory of certified
public accountants and public accountants deemed by the Controller to
be qualified to conduct audits of local educational agencies, as
provided in paragraph (1) of subdivision (f) of Section 41020 of the
Education Code . The costs of the audit shall be paid by the
district. The audits shall be performed until the Superintendent of
Public Instruction, in consultation with the county superintendent,
determines that the district is financially solvent , but
may not cease being performed earlier than one year following the
implementation of the plan required by Section 7 nor later than the
time the emergency loan, including interest, is repaid .
SEC. 10. (a) Notwithstanding subparagraph (A) of
paragraph (2) of subdivision (a) of Section 41327 of the Education
Code, the
SEC. 9. (a) The King
City Joint Union High School District shall repay the emergency loan
incurred pursuant to Section 9 8 of
this act as a straight line loan amortized over a 20-year term. This
amount shall be repaid by the district, plus interest calculated at a
rate equal to the rate earned by the Pooled Money Investment Account
on the date this act becomes effective, for a period not to exceed
20 years.
(b) If a required payment is not made within 60 days after a
scheduled date, the Controller shall pay the defaulted loan payment
of principal and interest by withholding that amount from the next
available payment that would otherwise be made to the county
treasurer on behalf of the district pursuant to Section 14041 of the
Education Code. However, subject to the approval of the Department of
Finance, the amount withheld may be in monthly amounts as determined
by an agreement between the King City Joint Union High School
District and the Controller during the period beginning with the next
available apportionment through the month preceding the next
scheduled payment.
(c) The school district shall enter into a lease financing with
the California Infrastructure and Economic Development Bank for the
purpose of financing the emergency apportionment, including a
repayment to the General Fund of the amount advanced pursuant to
Section 9 8 . In addition to the
emergency apportionment, the lease financing may include funds
necessary for reserves, capatalized interest, credit enhancements and
costs of issuance. The bank shall issue bonds for that purpose
pursuant to the powers granted pursuant to the Bergeson-Peace
Infrastructure and Economic Development Bank Act as set forth in
Division 1 (commencing with Section 63000) of Part 6.7 of the
Government Code. The term of the lease shall not exceed 20 years,
except that if at the end of the lease term any rent payable is not
fully paid, or if the rent payable has been abated, the term of the
lease shall be extended for a period not to exceed 10 years.
(d) The Director of Finance may amend the payment schedule set
forth in subdivision (a) if the director concludes that the amendment
is warranted and is in the best interests of both the state and the
King City Joint Union High School District education program. Upon
that determination, the director shall notify the Joint Legislative
Budget Committee that the payment scheduled will be changed on the
date that is 90 days from the date of notification if the Legislature
is in session. If the 90-day period ends during a recess of the
Legislature or while the Legislature is not in session, the 90-day
period shall be extended until the Legislature reconvenes. Amendments
to the payment schedule shall defer the unpaid portion of a
repayment of the earliest fiscal year in which no other repayment is
scheduled. Interest shall accrue on the unpaid portion of a repayment
from the scheduled due date until the time the payment is actually
made. The interest charge shall be the rate equal to the daily
investment rate of the Pooled Money Investment Account on the date
the pay schedule is changed.
(e) The school district may repay its loan obligation without
incurring any prepayment penalties.
SEC. 11. SEC. 10. (a)
Notwithstanding Sections 17456, 17457, 17462, and 17463 of the
Education Code, or any other law, from June 1, 2009, to June 30,
2012, inclusive, the King City Joint Union High School District may
sell property owned by the district and use the proceeds from the
sale to reduce or retire the emergency loan provided in Section
9 8 of this act. The sale only of
property pursuant to this subdivision is not subject to Section 17459
or 17464 of the Education Code.
(b) Notwithstanding any other provision of law, from June 1, 2009,
to June 30, 2011 2014 , inclusive, the
King City Joint Union High School District is not eligible for
financial hardship assistance pursuant to Article 8 (commencing with
Section 17075.10) of Chapter 12.5 of Part 10 of Division 1 of Title 1
of the Education Code.
SEC. 12. SEC. 11. The Monterey
County Superintendent of Schools maintains the responsibility to
superintend school districts under its jurisdiction. This act does
not remove any statutory or regulatory rights, duties, or obligations
from the county superintendent of schools.
SEC. 13. SEC. 12. The Legislature
finds and declares that due to unique circumstances relating to the
fiscal emergency in the King City Joint Union High School District a
general statute cannot be made applicable within the meaning of
Section 16 of Article IV of the California Constitution.
SEC. 14. SEC. 13. No reimbursement
is required by this act pursuant to Section 6 of Article XIII B of
the California Constitution because the only costs that may be
incurred by a local agency or school district are the result of a
program for which legislative authority was requested by that local
agency or school district, within the meaning of Section 17556 of the
Government Code and Section 6 of Article XIII B of the California
Constitution.
SEC. 15. SEC. 14. This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order to address the fiscal emergency in which the King City
Joint Union High School District finds itself, and to ensure that it
meets its cash obligations for this fiscal year, it is necessary that
this act take effect immediately.