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AB-3179 Education finance: school district finances: Educational Employment Relations Act.(2019-2020)

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Date Published: 02/21/2020 09:00 PM
AB3179:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 3179

Introduced by Assembly Member McCarty

February 21, 2020

An act to amend Section 42127.6 of the Education Code, and to amend Section 3547.5 of, and to add Section 3547.6 to, the Government Code, relating to education finance.


LEGISLATIVE COUNSEL'S DIGEST


AB 3179, as introduced, McCarty. Education finance: school district finances: Educational Employment Relations Act.
(1) Existing law requires the county superintendent of schools to take certain actions if, at any time during the fiscal year, the county superintendent determines that a school district may be unable to meet its financial obligations for the current or 2 subsequent fiscal years or if the district would have a qualified or negative certification, as specified, including, among others, notifying, and performing certain actions with the consultation of, the Superintendent of Public Instruction. Existing law establishes a process to appeal these determinations of the county superintendent by appealing to the Superintendent, as specified. Existing law requires the Superintendent to monitor the efforts of a county office of education in exercising its authority under these provisions, and authorizes the Superintendent to exercise any of that authority if the Superintendent finds that the actions of the county superintendent of schools are not effective in resolving the financial problems of the school district.
This bill, if a county superintendent of schools disapproves a school district’s budget for a subsequent year, would continue the authority of the county superintendent of schools to stay or rescind any action of the school district governing board that is determined to be inconsistent with the ability of the school district to meet its obligations for the current or subsequent fiscal year, without interruption, until the next subsequent year’s budget is approved by the county superintendent of schools.
(2) Existing law, commonly referred to as the Educational Employment Relations Act, authorizes public school employees to form, join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on all matters of employer-employee relations, as specified. The act establishes a process for an employee organization to become the exclusive representative of an appropriate unit for purposes of meeting and negotiating, as specified. The act requires a school district to provide the county superintendent of schools, upon request, with all information relevant to provide an understanding of the financial impact of any final collective bargaining agreement reached between a public school employer and the exclusive representative of school district employees, as specified. Existing law requires the superintendent and chief business official of a school district to certify in writing that the costs incurred by the school district under a collective bargaining agreement can be met by the district during the term of the agreement.
This bill would require the superintendent and the chief business official of a school district to provide the written certification described above under penalty of perjury.
The bill would also require, before a public school employer enters into a written agreement with a nonrepresented employee or group of nonrepresented employees, that the major provisions of the agreement, including, but not limited to, the costs that would be incurred by the public school employer under the term of the agreement for the current and subsequent fiscal years, be disclosed at a public meeting of the public school employer. To the extent that the requirement for disclosure at a public meeting would create new duties for a public school employer, it would constitute a state-mandated local program. The bill would also require the superintendent and the chief business official of the school district to certify in writing, and under penalty of perjury, that costs incurred by the school district under the agreement can be met by the school district during the term of the agreement, in a manner similar to that required with respect to an agreement with an exclusive representative.
By adding the requirement that the written certifications described above be provided under penalty of perjury, the bill would impose a state-mandated local program by creating a new crime.
(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 with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 42127.6 of the Education Code is amended to read:

42127.6.
 (a) (1) A school district shall provide the county superintendent of schools with a copy of a study, report, evaluation, or audit that was commissioned by the school district, the county superintendent, the Superintendent, and state control agencies and that contains evidence that the school district is showing fiscal distress under the standards and criteria adopted in Section 33127, or a report on the school district by the County Office Fiscal Crisis and Management Assistance Team or any regional team created pursuant to subdivision (i) of Section 42127.8. Team. The county superintendent shall review and consider studies, reports, evaluations, or audits of the school district that contain evidence that the school district is demonstrating fiscal distress under the standards and criteria adopted in Section 33127 or that contain a finding by an external reviewer that more than three of the 15 the school district is at moderate or high risk based on the most common predictors indicators of a school district needing intervention, as determined by the County Office Fiscal Crisis and Management Assistance Team, are present. Team. If these findings are made, the county superintendent of schools shall investigate the financial condition of the school district and determine if the school district may be unable to meet its financial obligations for the current or two subsequent fiscal years, or should receive a qualified or negative interim financial certification pursuant to Section 42131. If at any time during the fiscal year the county superintendent of schools determines that a school district may be unable to meet its financial obligations for the current or two subsequent fiscal years or if a school district has a qualified or negative certification pursuant to Section 42131, the county superintendent of schools shall notify the governing board of the school district and the Superintendent in writing of that determination and the basis for the determination. The notification shall include the assumptions used in making the determination and shall be available to the public. The county superintendent of schools shall report to the Superintendent on the financial condition of the school district and the county superintendent’s proposed remedial actions actions, and shall do at least one of the following and all actions that are necessary to ensure that the school district meets its financial obligations:
(A) Assign a fiscal expert, paid for by the county superintendent of schools, to advise the school district on its financial problems.
(B) Conduct a study of the financial and budgetary conditions of the school district that includes, but is not limited to, a review of internal controls. If, in the course of this review, the county superintendent of schools determines that the county superintendent’s office requires analytical assistance or expertise that is not available through the school district, the county superintendent of schools may employ, on a short-term basis, with the approval of the Superintendent, staff, including certified public accountants, to provide the assistance and expertise. The school district shall pay 75 percent and the county office of education shall pay 25 percent of these staff costs.
(C) Direct the school district to submit a financial projection of all fund and cash balances of the district as of June 30 of the current year and subsequent fiscal years as the county superintendent of schools requires.
(D) Require the district to encumber all contracts and other obligations, to prepare appropriate cashflow analyses and monthly or quarterly budget revisions, and to appropriately record all receivables and payables.
(E) Direct the school district to submit a proposal for addressing the fiscal conditions that resulted in the determination that the school district may not be able to meet its financial obligations.
(F) Withhold compensation of the members of the governing board of the school district and the school district superintendent for failure to provide requested financial information. This action may be appealed to the Superintendent pursuant to subdivision (b).
(G) Assign the County Office Fiscal Crisis and Management Assistance Team to review teacher hiring practices, teacher retention rate, percentage of provision of highly qualified teachers, and the extent of teacher misassignment in the school district and provide the school district with recommendations to streamline and improve the teacher hiring process, teacher retention rate, extent of teacher misassignment, and provision of highly qualified teachers. perform any or all of the duties prescribed in subparagraphs (A) to (C), inclusive, or to further review the causes that led to a finding of moderate or high risk pursuant to this subdivision and make recommendations for corrective action. If a review team is assigned to a school district, the school district shall follow the recommendations of the team, unless the school district shows good cause for failure to do so. The County Office Fiscal Crisis and Management Assistance Team may not recommend an action that would abrogate a contract that governs employment.
(2) Any contract entered into by a county superintendent of schools for the purposes of this subdivision is subject to the approval of the Superintendent.
(3) An employee of a school district who provides information regarding improper governmental activity, as defined in Section 44112, is entitled to the protection provided pursuant to Article 5 (commencing with Section 44110) of Chapter 1 of Part 25.
(b) Within five days of the county superintendent of schools making the determination specified in subdivision (a), a school district may appeal the basis of the determination and any of the proposed actions that the county superintendent of schools has indicated that the county superintendent of schools will take to further examine the financial condition of the school district. The Superintendent shall sustain or deny any or all parts of the appeal within 10 days.
(c) If, after taking the actions identified in subdivision (a), the county superintendent of schools determines that a school district will be unable to meet its financial obligations for the current or subsequent fiscal year, the county superintendent of schools shall notify the governing board of the school district, the Superintendent, the superintendent of the school district, each recognized employee organization of school district, the Superintendent, and the president of the state board or the president’s designee in writing of that determination and the basis for that determination. The notification shall include the assumptions used in making the determination and shall be provided to the superintendent of the school district and parent and teacher organization of the school district. determination.
(d) Within five days of the county superintendent of schools making the determination specified in subdivision (c), a school district may appeal that determination to the Superintendent. The Superintendent shall sustain or deny the appeal within 10 days. If the governing board of the school district appeals the determination, the county superintendent of schools may stay any action of the governing board of the school district that the county superintendent of schools determines is inconsistent with the ability of the school district to meet its financial obligations for the current or subsequent fiscal year until resolution of the appeal by the Superintendent.
(e) If the appeal described in subdivision (d) is denied or not filed, or if the school district has a negative certification pursuant to Section 42131, the county superintendent of schools, in consultation with the Superintendent, shall take at least one of the actions described in paragraphs (1) to (5), inclusive, and all actions that are necessary to ensure that the school district meets its financial obligations and shall make a report to the Superintendent and the president of the state board or the president’s designee about the financial condition of the school district and remedial actions proposed by the county superintendent of schools.
(1) Develop and impose, in consultation with the Superintendent and the governing board of the school district, a budget revision that will enable the school district to meet its financial obligations in the current fiscal year.
(2) Stay or rescind any action of the governing board of the school district, or of a personnel commission established pursuant to Section 45240, that is determined to be inconsistent with the ability of the school district to meet its obligations for the current or subsequent fiscal year. This includes any actions up to the point that the subsequent year’s budget is approved by the county superintendent of schools. If the subsequent year’s budget is disapproved by the county superintendent of schools, the authority under this paragraph shall continue without interruption until the next subsequent year’s budget is approved by the county superintendent of schools. The county superintendent of schools shall inform the governing board of the school district district, and, if applicable, the personnel commission, in writing of the county superintendent’s justification for any exercise of authority under this paragraph.
(3) Assist in developing, in consultation with the governing board of the school district, a multiyear financial recovery plan that will enable the school district to meet its future obligations.
(4) Assist in developing, in consultation with the governing board of the school district, a budget for the subsequent fiscal year. If necessary, the county superintendent of schools shall continue to work with the governing board of the school district until the budget for the subsequent year is adopted. adopted by the governing board of the school district and approved by the county superintendent of schools.
(5) As necessary, appoint a fiscal adviser to perform any or all of the duties prescribed by this section on behalf of the county superintendent of schools.
(f) Any action taken by the county superintendent of schools pursuant to paragraph (1) or (2) of subdivision (e) shall be accompanied by a notification that shall include the actions to be taken, the reasons for the actions, and the assumptions used to support the necessity for these actions.
(g) This section does not authorize the county superintendent of schools to abrogate any provision of a collective bargaining agreement that was entered into by a school district before the date that the county superintendent of schools assumed authority pursuant to subdivision (e).
(h) The school district shall pay 75 percent and the county office of education shall pay 25 percent of the administrative expenses incurred pursuant to subdivision (e) or costs associated with improving the school district’s financial management practices. The Superintendent shall develop and distribute to affected school districts and county offices of education advisory guidelines regarding the appropriate amount of administrative expenses charged pursuant to this subdivision.
(i) Notwithstanding Section 42647 or 42650 or any other law, a county treasurer shall not honor any warrant if, pursuant to Sections 42127 to 42127.5, inclusive, or pursuant to this section, the county superintendent of schools or the Superintendent, as appropriate, has disapproved that warrant or the order on school district funds for which a warrant was prepared.
(j) Effective upon the certification of the election results for a newly organized school district pursuant to Section 35763, the county superintendent of schools may exercise any of the powers and duties of this section regarding the reorganized school district and the other affected school districts until the reorganized school district becomes effective for all purposes in accordance with Article 4 (commencing with Section 35530) of Chapter 3 of Part 21.
(k) The Superintendent shall monitor the efforts of a county office of education in exercising its authority under this section and may exercise any of that authority if the Superintendent finds that the actions of the county superintendent of schools are not effective in resolving the financial problems of the school district. Upon a decision to exercise the powers of the county superintendent of schools, the county superintendent of schools is relieved of those powers assumed by the Superintendent, and shall provide support and assistance to the Superintendent in the exercise of those powers. The Superintendent shall also request that the County Office Fiscal Crisis and Management Assistance Team identify the circumstances that led to the ineffectiveness of the county superintendent of schools in resolving the financial problems of the school district, and shall require the county office of education to demonstrate, in a manner determined by the Superintendent, remediation of those deficiencies. In addition to the actions taken by the county superintendent of schools, the Superintendent shall take further actions to ensure the long-term fiscal stability of the school district. The county office of education shall reimburse the Superintendent for all of the Superintendent’s costs in exercising the Superintendent’s authority under this subdivision. The Superintendent shall promptly notify the county superintendent of schools, the county board of education, the superintendent of the school district, the governing board of the school district, the appropriate policy and fiscal committees of each house of the Legislature, and the Department of Finance of the Superintendent’s decision to exercise the authority of the county superintendent of schools.

SEC. 2.

 Section 3547.5 of the Government Code is amended to read:

3547.5.
 (a) Before a public school employer enters into a written agreement with an exclusive representative covering matters within the scope of representation, the major provisions of the agreement, including, but not limited to, the costs that would be incurred by the public school employer under the term of the agreement for the current and subsequent fiscal years, shall be disclosed at a public meeting of the public school employer in a format established for this purpose by the Superintendent of Public Instruction.
(b) The superintendent and the chief business official of the school district and chief business official shall certify in writing writing, and under penalty of perjury, that the costs incurred by the school district under the agreement can be met by the district during the term of the agreement. This certification shall be prepared in a format similar to that of the reports required pursuant to Sections 42130 and 42131 of the Education Code Code, and shall itemize any budget revision necessary to meet the costs of the agreement in each year of its term.
(c) If a school district does not adopt all of the revisions to its budget needed in the current fiscal year to meet the costs of a collective bargaining agreement, the county superintendent of schools shall issue a qualified or negative certification for notice of going concern determination to the district on the next interim report pursuant to Section 42131 paragraph (1) of subdivision (a) of Section 42127.6 of the Education Code.

SEC. 3.

 Section 3547.6 is added to the Government Code, to read:

3547.6.
 (a) Before a public school employer enters into a written agreement with a nonrepresented employee or group of nonrepresented employees, as defined in this chapter, the major provisions of the agreement, including, but not limited to, the costs that would be incurred by the public school employer under the term of the agreement for the current and subsequent fiscal years, shall be disclosed at a public meeting of the public school employer in a format established for this purpose by the Superintendent of Public Instruction.
(b) The superintendent and the chief business official of the school district shall certify in writing, and under penalty of perjury, that the costs incurred by the school district under the agreement can be met by the school district during the term of the agreement. This certification shall be prepared in a format similar to that of the reports required pursuant to Sections 42130 and 42131 of the Education Code, and shall itemize any budget revision necessary to meet the costs of the agreement in each year of its term.
(c) If a school district does not adopt all of the revisions to its budget needed in the current fiscal year to meet the costs of the written agreement with a nonrepresented employee or group of nonrepresented employees, the county superintendent of schools shall issue a notice of going concern determination to the district pursuant to Section 42127.6 of the Education Code.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
However, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.