BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: SB 821
AUTHOR: Fuller
AMENDED: April 28, 2011
FISCAL COMM: No HEARING DATE: May 11, 2011
URGENCY: No CONSULTANT: Daniel Alvarez
SUBJECT : Oversight of fiscal actions of newly organized or
reorganized school districts.
SUMMARY
This bill provides that a county superintendent of schools,
during the transition period of a school district
unification, merger, or formation may stop an action of an
outgoing governing board if that action would have a
material fiscal impact on the newly formed school district.
BACKGROUND
Current law:
Specifies that effective upon the certification of the
election results for a newly organized school district,
the county superintendent of schools may intervene during
the transition period before the newly organized district
becomes operational if there is reason to believe that
any actions of the outgoing school districts may
jeopardize the fiscal solvency of the new district.
(Education Code � 42127.6 (j))
Prescribes the duties, responsibilities, and general
powers of county superintendents of schools, including,
but not limited to: (a) superintend the schools of their
county, and (b) maintain the fiscal oversight of each
school district in his or her county pursuant to the
authority granted in throughout the education code.
(Education Code � 1240)
States the intent of the Legislature that local
educational needs and concerns serve as the basis for
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future reorganizations of districts in each county. In
addition, current law provides for a county committee on
school district organization in each county (county
committee) to consider locally developed reorganization
petitions to transfer territory among districts; unify,
merge or create new districts or revise the boundaries of
trustee areas. Proposals for transfer of territory may be
decided by the county committee in a public hearing,
although such decisions to transfer more than 10% of a
district's territory must be ratified by a vote of the
people in the affected districts. The decisions of the
county committee may be appealed to the State Board of
Education (SBE) for specified reasons. When the
reorganization proposal involves more than a transfer of
territory, the county committee holds a public hearing
and forwards the proposal, along with the committee's
recommendation, to the SBE. Current law provides that if
the SBE approves a proposal for reorganization then the
proposal is returned to the County for approval of a vote
of the people in the territory being reorganized.
(EC � 35500 et. seq.)
ANALYSIS
This bill specifies, upon the voter approval of a petition
for reorganization and continuing after certification of
election results for a newly organized school district or
upon the appointment of an interim governing board, until
the effective date of the newly organized or newly formed
school district, the existing school district(s), as
specified, are subject to all of the following:
1) Requires the interim board or the governing board of
the existing school district(s), and, where
applicable, the administrators of the existing school
district(s), that during the transition period to a
newly organized school district, to notify the county
superintendent of schools in writing and provide
relevant documents or information no less than 10
school days before taking any action that would have a
material fiscal impact on, or impose a debt or
liability on the existing, proposed, newly formed, or
newly organized school district.
Specifies that failure to provide notice nullifies the
action taken by the board or administrator of the
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school district(s).
2) Permits the county superintendent of schools to review
any action taken or proposed to be taken by any
interim or existing governing board to determine
whether the action would have a material fiscal
impact, debt, or liability on the existing, proposed,
newly formed, or newly organized school district.
If, based on the review, the county superintendent
determines that the action would have a material
fiscal impact and that action is unnecessary for the
immediate functioning of the existing or newly formed
school district then the county superintendent may
stay or rescind that action.
The county superintendent of schools is required to
inform the existing or interim reorganized school
district governing board of the school district in
writing on his/her justification for denying the
request.
3) Requires a school district to provide documents or
information requested by the county superintendent of
schools in a timely manner related to the proposed
action that is under review.
4) Clarifies that requirements of this measure apply
irrespective of a school district's budget or
certification status, as specified.
STAFF COMMENTS
1) Additional background . In 2007, Sacramento voters
approved the reorganization / unification of the Grant
Joint Union High School District (GJUHSD) and three
smaller elementary school districts into one district
- effective July 1, 2008, the merger resulting in a
new, larger district known as the Twin Rivers Unified
School District.
In early 2008, the GJUHSD (one of the outgoing
governing boards) adopted, among other things, the
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awarding of severance buyout packages to 14
administrators. At that time, the county
superintendent of schools raised concerns about the
legal propriety of the actions and how the issues were
presented to the outgoing board, and refused to
process the payroll warrants associated with the
severance buyout package. The GJUHSD filed suit in
Superior Court of Sacramento seeking to compel the
county superintendent and the county office of
education (COE) to process the approved payroll
warrants - citing that the county superintendent of
schools and COE did not have the right to substitute
their judgment for that of the governing board of the
GJUHSD and that none of the concerns about legal
propriety had merit. The Superior Court, in June 2008,
ruled in favor of GJUHSD determining that the county
superintendent abused his discretion under the
Education Code in refusing to process the payroll
warrants and that the county superintendent failed to
produce substantial evidence that the severance
buyouts were improperly adopted. The county
superintendent and the Sacramento County Office of
Education (SCOE) filed an appeal.
After examination of the respective roles of the
GJUHSD and the county superintendent of schools, the
Third Appellate Court, in December 2009, concluded
that the county superintendent in his refusal to
process the severance payroll warrants had the
authority to do so and did not abuse his discretion in
exercising it. The Appellate Court pointed out that
statute vests to county superintendents of schools
general oversight powers and, specifically, the
authority to act as a watchdog for each school
district's fiscal affairs, and that current law,
through review of legislative history, gave the county
superintendent of schools a prompt, effective means of
stopping wasteful or unnecessary expenditures by the
outgoing governing boards of school districts within
his/her jurisdiction. Accordingly, the Appellate
Court overturned the writ of mandate.
2) The need for this bill is prompted by the events of
the aforementioned court cases and the need to clearly
articulate the role and responsibilities of county
superintendent of schools during the transition period
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after a vote of reorganization of a school board(s)
has been passed by voters, and when the newly formed
or organized school district takes effect.
3) Authority granted under this measure consistent with
AB 1200 . AB 1200 (Chapter 1213, Statutes of 1991) was
created because of the need to ensure that local
educational agencies throughout California adequately
prepare to meet their financial obligations.
AB1200 is a statewide plan for county offices of
education and school districts to work together on the
local level to improve fiscal procedures, standards
and accountability. AB1200 expands the role of county
offices of education and county superintendents of
schools in monitoring school districts and mandates
intervention by the county superintendent of schools
to ensure fiscal stability of a district if it is
determined the district has become unable to meet its
obligations in the current and future year(s).
In crisis situations county offices can call upon the
Fiscal Crisis and Management Assistance Team (FCMAT)
to help determine appropriate steps toward fiscal
recovery. AB1200 provisions also apply to the state in
its monitoring role over county offices of education.
There are several defined "fiscal crises" that can
prompt a county office of education to intervene in a
district: a disapproved budget, a qualified or
negative interim report or recent actions by a
district that lead the county office to conclude that
the district will not be able to meet its financial
obligations. AB1200 spells out the procedures by which
a county office monitors, assists, warns, or
intervenes in the fiscal operation of a school
district. A district can appeal a disapproved budget
or a negative or qualified interim certification all
the way up to the State Superintendent of Public
Instruction. In any of these situations, a county
office or even the state could ask for FCMAT's
assistance and assessment.
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4) Results of reorganizations . According to information
provided by the California Department of Education,
the impact of voluntary reorganization has not been
dramatic. From 1971-72 through 2009-10, the total
number of school districts declined as indicated
below.
Change in Number of School Districts
-----------------------------------------------
|Type of | | | |
|School | 1971-72 | 2009-10 | Change |
|District | | | |
|------------+-----------+-----------+----------|
|Unified | 242 | 334 | +92 |
|------------+-----------+-----------+----------|
|Elementary | 709 | 546 | -163 |
|------------+-----------+-----------+----------|
|High | 117 | 83 | -34 |
|------------+-----------+-----------+----------|
|Total | 1,068 | 963 |-105 |
-----------------------------------------------
Since 1931-32, when there were 3,595 school districts
in California, the total number of districts has
decreased by 2,632, or 73 percent. The pace of change
in school district organization may have slowed, but
it is still proceeding at a steady rate.
5) Staff recommends technical amendments to provide
greater clarity and operationalization of this
measure:
a) On page 3, line 14, after "notice" insert:
"and relevant documents and information".
b) On page 3, line 33, strike "administrators"
SUPPORT
California County Superintendents Educational Services
Association
Kern County Superintendent of Schools
Riverside County Superintendent Schools
Twin Rivers Unified School District
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OPPOSITION
None received.