BILL ANALYSIS �
AB 2087
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Date of Hearing: April 22, 2014
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 2087 (Ammiano) - As Introduced: February 20, 2014
SUBJECT : Community colleges: Board of Governors of the
California Community Colleges.
SUMMARY : Specifies that the California Community College (CCC)
Board of Governors (BOG) may not usurp, transfer, or limit, in
any way, the powers of the governing boards of community college
districts (CCD).
EXISTING LAW :
1)Establishes the CCC BOG, appointed by the Governor, and a
Chancellor, appointed by the BOG, to prescribe minimum
standards for the formation and operation of CCC and to
exercise general supervision over the CCC (Education Code
�66700, 71000, 71090).
2)Requires the CCC BOG in establishing specified minimum
standards for CCC operation and receipt of state funding to
maintain and continue, to the degree permissible, local
authority and control in the administration of the CCC (EDC
�70901).
3)Requires each CCD to be under the control of a locally elected
board of trustees (governing board), requires the governing
board to operate the CCD in compliance with state law, and
authorizes the governing board to delegate powers to the CCD
executive officer, employee or committee (EDC �70902).
4)Requires the CCC BOG to establish standards for fiscal
management practices of CCD governing boards and requires BOG
to develop procedures and actions for districts that fail to
achieve fiscal ability or to comply with BOG recommendations,
including the appointment of a special trustee to manage the
district. The BOG is required to report to the Legislature,
the Department of Finance, and the Governor regarding any
corrective actions taken by the CCD or the BOG to ensure
fiscal stabilization (EDC �84040).
5)Pursuant to BOG regulations (5 CCR �58312), the CCC Chancellor
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has authority to take corrective actions to ensure fiscal
stabilization if the Chancellor has determined a CCD:
a) Established plans for corrective action that are
insufficient to solve financial problems or implement sound
fiscal management;
b) Has failed to implement corrective plans; or,
c) College within the CCD is in imminent jeopardy of losing
its accreditation, which would create severe fiscal
problems.
6)Regulations (5 CCR �58312) also direct the Chancellor to first
utilize measures that minimize interference with CCD
operations, unless the Chancellor determines that action is
necessary to prevent a worsening of fiscal conditions. The
Chancellor is authorized to take the following actions:
a) Conduct a comprehensive management review of the
district and an audit of the financial condition of the
district;
b) Direct the district to amend and readopt financial and
educational plans based on the findings of the audits;
c) Review and monitor the implementation of the plans and
direct the district to make any modifications necessary;
and,
d) Appoint a special trustee at the district expense for
the period of time necessary to achieve fiscal solvency,
implement sound fiscal management, or maintain
accreditation status. In appointing a special trustee:
i) The Chancellor is required to establish benchmarks
that indicate local capacity to manage fiscal duties;
ii) The special trustee is required to have recognized
expertise in finance and, with the approval of the
Chancellor, may employ short-term staff for assistance;
and,
iii) The Chancellor and the special trustee are required
to specify in writing the special trustee's duties, which
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may include:
(1) Reviewing and monitoring plans, reports, and
other financial material;
(2) Requiring further modifications to the fiscal
and educational plans;
(3) Determining district spending levels and
priorities to further achievement of fiscal stability;
and,
(4) Approving or disapproving actions of the
district which affect or relate to the implementation
of the plans.
7)Regulations (5 CCR �58312) authorize, with the approval of the
BOG, the Chancellor to authorize the special trustee to assume
management and control of the district, including the
assumption of legal rights and powers and duties of the
governing board, as necessary to achieve fiscal stability, to
implement sound fiscal management, or to maintain or recover
accredited status:
a) Pursuant to regulations, the Chancellor is only
authorized to elevate the special trustee powers to full
district management for one year, unless the BOG approves
one or more one-year extensions; and,
b) The special trustee, when managing the district, is
subject to all legal requirements applicable to the
district and the governing board is prohibited from
exercising any authority that has been assumed by the
special trustee.
8)Regulations (5 CCR �58312) authorize the Chancellor to require
the district to pay all costs incurred in performing the
duties necessary to restore fiscal stability or accreditation
status.
FISCAL EFFECT : Unknown
COMMENTS : Purpose of this bill . According to the author, this
bill is necessary to "address the vague language found in the
Education Code that gives the BOG, as appointed body, the
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authority to take away decision making power from a college's
Board of Trustees, an elected body." The author argues that,
"Citizens go to the ballot box to vote with the idea in mind
that their voice will be represented by the individual they
choose for elected office. San Francisco voters approved
Proposition A in 2012, a parcel tax that would aid the recovery
of San Francisco City College (SFCC). San Francisco voters also
elected SFCC District Board of Trustee members with the
knowledge that these elected officials could be held accountable
for managing the recently passed parcel tax (Prop. A). The BOG
and the Special Trustee are unelected individuals and voters
cannot hold either the board of the special trustee accountable
for their actions."
Background . In July of 2012, SFCC was placed on "Show Cause"
status by its accrediting agency, Western Association of Schools
and Colleges-Accrediting Commission for Community and Junior
Colleges (ACCJC). The ACCJC visiting team found that the
college had insufficient cash flow and reserves to maintain
financial stability and no realistic plans for the future. The
institution was provided one year to establish compliance with
accrediting standards.
The CCC Chancellor's Office (CCCCO) and the Fiscal Crisis &
Management Assistance Team (FCMAT) released an audit, in
September of 2012, of SFCC fiscal stability and management
controls. The audit found that SFCC was near fiscal insolvency
resulting from poor financial decisions and lack of
accountability. In October 2012, the CCC BOG appointed Robert
Agrella as special trustee under the aforementioned limited
powers (See: Existing Law 6(d)) to assist SFCC in achieving
sound financial management.
In July of 2013, ACCJC terminated SFCC accreditation effective
July 31, 2014. The ACCJC visiting team found that of the
recommendations, SFCC fully addressed only two, nearly addressed
just one, and eleven were inadequately addressed. Also in July,
CCCCO and FCMAT released a second SFCC fiscal review which found
overall non-implementation of 2012 recommendations due to
"internal struggles and a general unwillingness to make hard
decisions and see change occur." FCMAT found that "absent
strong and consistent leadership, progress will be extremely
difficult to achieve."
On July 9, 2013, BOG voted to authorize the special trustee for
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SFCC District to assume the management and control of the
District (See: Existing Law 7). This decision was based on a
BOG analysis that SFCC had not developed a plan to fund
liabilities and obligations, had not made ongoing funding
reductions necessary to maintain fiscal solvency, had employed
twice as many full-time faculty and incurred expenses $17
million higher than comparison districts, and that the magnitude
of employee contract obligations made it difficult for the
district to achieve fiscal health without change. The BOG
analysis found that SFCC did not have an effective management
plan, which is necessary to effectively use available resources
and that faculty were provided an inordinate amount of expensive
faculty release time. Finally, the BOG analysis identified as a
major barrier to financial stability that decisions with serious
fiscal implications were made without any individual having
accountability for those decisions.
Currently, according to the CCCCO, SFCC special trustee and the
recently appointed chancellor, Arthur Tyler, are working to meet
the ACCJC accreditation standards and achieve fiscal stability,
with the goal of restoring accreditation to the college and
returning management control to the local governing board.
According to estimates, without Legislative intervention,
declining enrollment at SFCC could result in $23 million in
reduced funding to the college in 2014-15. SB 965 (Leno),
pending in the Senate Education Committee, would provide four
years of stabilization funding to SFCC to account for this
declining enrollment; CCC BOG appointment of a special trustee
is a condition of receipt of funding. The Committee may wish to
consider the implications of removing state level oversight and
control of the SFCC District (and any future districts that face
fiscal insolvency and loss of accreditation) in the context of
the pending request for state funding.
Arguments in support . The California Federation of Teachers
supports this bill, arguing that "community college governing
boards are elected and come from the community. They strive to
be responsive to the immediate and long-term needs of their
community."
Gray Panthers of San Francisco writes, "This bill is necessary
to prevent future precipitous acts like the coup d'etat last
year against the elected Board of Trustees of City College of
San Francisco. This was based on allegations - neither proven
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nor unproven - that are currently being contested legally. The
suspension of the college's Board is a blatant, egregious attack
on the principles of democracy in education."
According to information provided by the author's office, a
resolution recently approved by the San Francisco Board of
Supervisors urges the CCC Chancellor to restore the voice of San
Francisco voters and bring democratic decision-making,
transparency, and public accountability back to City College of
San Francisco by restoring the duly elected SFCC Board of
Trustees.
Arguments in opposition . The CCCCO argues "assigning a special
trustee is a rare step and only done after other, less intrusive
alternatives have been exhausted." CCCCO notes that in most
cases special trustees have been assigned to only provide
advisory support to a struggling district. Only in two cases
(SFCC and Compton Community College District) has the BOG
elevated the powers of a special trustee and suspended the
authority of a local governing board. The CCCCO believes that
in these situations "State oversight was necessary and prudent
given impending fiscal crisis and imminent threats to
accreditation."
The Community College League of California, which represents
locally-elected trustees and CEOs, argues that the BOG "has an
important oversight role to play in ensuring locally elected
boards are adequately serving students" and that in the two
cases where the BOG has intervened "state oversight was
necessary and prudent".
The CCC Chief Instructional Officers (CCCCIO) oppose this bill
and argues, "in some cases the local board may not have the
expertise necessary to lead the college out of a crisis; in
other cases, to be blunt, the local board itself may have caused
some of the issues." The CCCCIO argues that "we do not believe
appointment of a special trustee should take place without much
deliberation and consideration of alternatives, but we also
believe removing that option from the BOG is not in the best
interest of the system."
Alternative approach . In its current form, this bill would
eliminate the authority of the CCC BOG to intervene in when
districts face fiscal insolvency and/or loss of accreditation.
A state-level intervention process is currently in place when a
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K-12 district is fiscally insolvent. The policy rationale for
proposing to treat CCC districts and K-12 districts differently
in these circumstances is unclear; both receive the majority of
funding from state moneys. Rather than removing the CCC BOG
authority entirely, the author may wish to consider, similar to
requirements in K-12 district intervention, establishing
statutory parameters associated with the use of the CCC BOG
authority. For example, the author could require the CCC BOG to
establish specific benchmarks for the return of local governance
authority and/or clear standards that provide meaningful
consultation on the part of the appointed special trustee with
the college stakeholders (governing board, faculty, students,
public, etc.).
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers
Gray Panthers of San Francisco
Los Angeles College Faculty Guild
Peralta Federation of Teachers
Several Individuals from San Francisco
Opposition
Board of Governors California Community College
California Community College Chief Instructional Officers
Community College League of California
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960