BILL ANALYSIS �
AB 2621
Page 1
Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
AB 2621 (Hueso) - As Amended: May 2, 2012
SUBJECT : Education finance: school cafeterias: cafeteria
fund
SUMMARY : Permits the Grossmont Union High School District and
the Sweetwater Union High School District to enter into a
revenue-sharing agreement between their school cafeterias and
their associated student body organizations. Specifically, this
bill :
1)Permits the above-named districts to allow as an expenditure
from their respective cafeteria funds or accounts a portion of
any funds that accrue from the joint sale of items involving a
school cafeteria and an associated student body student store
that is determined pursuant to an agreement entered into
between the school cafeteria and the associated student body
organization of that school.
2)Requires any such agreement to meet all of the following
requirements:
a) The term of the agreement shall be for a period not to
exceed five years;
b) The agreement shall be effective only if the school
district has obtained the prior written approval from the
exclusive employee representative of the classified
employees in food service or cafeteria positions.; and
c) The participation of pupils, either as employees or
volunteers under the agreement, shall not result in the
displacement of any classified employees, in a failure to
fill new classified positions, or in a failure to fill
vacancies that may occur in existing classified positions.
3)Defines "displacement" to include, but not be limited to,
layoff, demotion, reduction in work hours or work year, or
transfer to another classification or site.
EXISTING LAW
1)Allows a school district with more than 100,000 average daily
AB 2621
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attendance to enter into an agreement with its associated
student body to share revenues generated by the joint sale of
items between the cafeteria and an associated student body
student store (Education Code Section 38092).
2)Provides that the cafeteria fund shall be used only for those
expenditures authorized by the governing board as necessary
for the operation of school cafeterias, including, but not
limited to, expenditures for the lease or purchase of
additional cafeteria equipment for the central food processing
plant, vending machines and their installation and housing,
and computer equipment and related software (Education Code
Section 38091).
3)Provides that revenues received by the school food service
shall be used only for the operation or improvement of the
food service and that expenditures of school food service
revenues shall be in accordance with the financial management
system established by the state agency �Code of Federal
Regulations, Title 7, Part 210.14(a)].
FISCAL EFFECT : This bill is keyed nonfiscal
COMMENTS : This bill is sponsored by the Sweetwater Union High
School District (SUHSD), which established a revenue sharing
agreement between its cafeteria and its Associated Student Body
(ASB) organization in 2010-11. Pursuant to that agreement,
student volunteers staffed food stations, filled meal orders,
and served as cashiers for the food service. In exchange, a
portion of food service revenues were transferred to the ASB
organization. The district reports that this arrangement
increased food service sales, provided job training for
students, and provided additional revenue for the ASB
organization.
However, an audit by the California Department of Education
(CDE) found this agreement to be in violation of state law and
federal regulations. The CDE audit report, dated February 21,
2012, found the transfer of funds to the ASB organization to be
an expenditure that is "not reasonable or necessary for the
maintenance of the nonprofit food service" as required by state
law and violated the federal requirement that food service
revenues be used only for the operation of the food service.
The CDE ordered that $316,068 be returned to the district's
cafeteria fund from the ASB organization.
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The SUHSD disagrees with the CDE's interpretation of federal
regulations. At the district's request, U. S. Representative
Bob Filner has addressed a letter to the U. S. Department of
Agriculture (USDA) seeking clarification. The letter asks the
following questions:
1)Does the USDA agree that the MOUs between the Sweetwater
District's food services department and ASB organization
violated federal regulations and laws governing the financial
management of the nonprofit food service Cafeteria Account?
2)In order to make such ASB/Cafeteria partnerships allowable is
it necessary to amend the Code of Federal Regulations?
This bill amends state law to allow two school
districts-Sweetwater and Grossmont-to enter into revenue sharing
contracts between the food service and the ASB organization.
The bill also contains provisions to protect food service
employees from being displaced as a result of such agreements.
However, according to the CDE, which is responsible for
enforcing the federal law, such contracts would still be in
violation of federal regulations. Unless and until the USDA
rules otherwise, CDE's interpretation will be enforced. The
bill provides that its provisions are "Notwithstanding Section
38092 or any other law." This creates a potential conflict
between state and federal law. To avoid this, staff recommends
that this provision be amended to read, "Notwithstanding Section
38092 and to the extent permitted by federal law."
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087