BILL ANALYSIS �
AB 2087
Page 1
ASSEMBLY THIRD READING
AB 2087 (Ammiano)
As Amended April 24, 2014
Majority vote
HIGHER EDCUATION 13-0 APPROPRIATIONS 17-0
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|Ayes:|Williams, Ch�vez, Bloom, |Ayes:|Gatto, Bigelow, |
| |Fong, Fox, Jones-Sawyer, | |Bocanegra, Bradford, Ian |
| |Levine, Achadjian, | |Calderon, Campos, |
| |Medina, Olsen, | |Donnelly, Eggman, Gomez, |
| |Quirk-Silva, Weber, Wilk | |Holden, Jones, Linder, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires that regulations of the California Community
Colleges (CCC) Board of Governors (BOG) regarding the
appointment of the special trustee to manage a community college
district must include specific benchmarks to indicate the
district's capacity to resume its management and standards.
EXISTING LAW requires the CCC BOG to establish standards for
fiscal management practices of community college districts (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 (Education Code Section
84040).
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor absorbable cost to the Chancellor's Office of
the CCC to develop regulations for consideration and adoption by
the BOG. Depending on the parameters of the regulations
regarding consultation, a CCD under the management of a special
trustee could incur costs related to conducting such meetings.
Depending on the specific requirements for consultation,
decision-making by a special trustee could be delayed, with
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unknown fiscal consequences for the college's recovery.
COMMENTS : In July of 2012, San Francisco City College (SFCC)
was placed on "Show Cause" status by its accrediting agency, the
Western Association of Schools and Colleges-Accrediting
Commission for Community and Junior Colleges (ACCJC). The ACCJC
visiting team found, among other deficiencies, 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 BOG appointed Robert
Agrella as special trustee under the aforementioned limited
powers to assist SFCC in achieving sound financial management.
In July 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
SFCC District to assume the management and control of the SFCC
District. 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
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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.
Prior to the amendments taken in the Assembly Higher Education
Committee, this bill would have eliminated the BOG's authority
to intervene when districts face fiscal insolvency and/or loss
of accreditation. The author was concerned that an unelected
trustee was managing SFCC in lieu of elected district board
members accountable to the citizens of the district. Since a
state-level intervention process is also in place when a K-12
school district is fiscally insolvent, the policy rationale for
proposing to treat CCC districts and K-12 districts differently
in these circumstances was unclear, as both receive the majority
of funding from state funds.
Rather than removing the BOG authority, this bill, as amended by
the Assembly Higher Education Committee, requires the BOG to
promulgate regulations to require benchmarks for the return of
local governance authority, and clear standards that provide
meaningful consultation on the part of the appointed special
trustee with college stakeholders.
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960
FN: 0003369